MoneyGram flexes $650-$675 million term loan to Libor plus 600 bps

By Sara Rosenberg

New York, May 28 – MoneyGram International Inc. increased pricing on its $650 million to $675 million first-lien term loan (B2) due May 2023 to Libor plus 600 basis points from Libor plus 550 bps, according to a market source.

Also, the original issue discount on the term loan was revised to 98.5 from 99, and the call protection was changed to non-callable for one year, with a 104 option in year one for a change of control, then at 102 in year two and 101 in year three, from 101 soft call protection for one year, the source said.

The first-lien term loan has a 1% Libor floor.

Bank of America Merrill Lynch is the lead bank on the deal.

Commitments are due at 3 p.m. ET on Wednesday, the source added.

Proceeds will be used to amend and extend an existing first-lien term loan due March 2020 priced at Libor plus 325 bps with a 1% Libor floor.

Currently, there is about $900 million outstanding under the existing first-lien term loan, but the company will repay $245 million of the debt with proceeds from a $245 million senior secured second-lien term loan (Caa2/CCC+).

The second-lien term loan has an annual interest rate of 13%, a portion of which would be payable in kind at the company’s option, as well as provide for customary fees and an original issue discount.

Bank of America arranged the second-lien term loan. BPC Lending I LLC, an affiliate of Beach Point Capital Management, has committed to provide $200 million of the facility, and the Carlyle Group, or an affiliate, will also participate in a portion.

Closing on the second-lien loan is conditioned on MoneyGram refinancing or extending its existing senior secured revolving credit facility and first-lien term loan.

The second-lien loan would mature upon the earlier of six years after closing or 12 months following the maturity date of the refinanced or extended first-lien term loan.

Upon closing of the second-lien term loan, the company would issue warrants to the lenders representing 8% of outstanding common stock, assuming full conversion of the company’s series D participating convertible preferred stock.

MoneyGram is a Dallas-based money transfer company.

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