KCG Holdings asks 8¼% noteholders to use collateral to buy 3.5% convertibles, prepay loan

By Tali David

Minneapolis, Sept. 30 - KCG Holdings, Inc. began a consent solicitation relating to its 8¼% senior secured notes due 2018, according to an 8-K filing with the Securities and Exchange Commission.

The company is soliciting consents from registered holders of the notes to amend the terms of (a) the indenture, dated as of June 5, 2013, between the company, Bank of New York Mellon as trustee and collateral agent and certain subsidiary guarantors; (b) the security agreement, dated July 1, 2013, by and among the company, the guarantors and the trustee; and (c) the cash collateral agreement, dated July 1, 2013, by and among the company, Bank of New York Mellon as account custodian and Jefferies Finance LLC as collateral agent for the secured parties and as gratuitous agent for the trustee.

KCG is seeking consent to these amendments to allow it to use the funds on deposit in a cash collateral account subject to the agreement previously set aside to purchase the 3.5% cash convertible senior subordinated notes due 2015 issued by Knight Capital Group, Inc. and to prepay a portion of the principal amount of borrowings under the company's credit agreement from time to time for a period of 60 days following the effective time of the proposed amendments.

Jefferies is the documentation agent, administrative agent, collateral agent and syndication agent of the credit agreement, and Jefferies and Goldman Sachs Bank USA are the joint lead arrangers and joint book managers.

Or, the amendments would allow the purchase, redemption or repayment of the 2015 convertible notes, at any price, including at a premium or at a discount from the face value thereof, with any available cash, including the collateralized cash proceeds.

These proposed amendments would allow the company to reduce its overall level of debt and debt service costs.

The consent solicitation will expire at 5 p.m. ET on Oct. 14.

Consents are needed from the holders of a majority of the outstanding notes in order to make the amendments.

The company is offering a consent fee of $5 for each $1,000 principal amount of notes.

Jefferies LLC is the solicitation agent (contact Justin Polselli at 888 708-5831 or 203 363-8273).The information and tabulation agent is i-Deal LLC (contact Aaron Dougherty at 888 593-9546, 212 849-3880 or consent@ipreo.com).

KCG is a Jersey City, N.J.-based financial services firm.

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