Affinion wraps exchange of 12½%/PIK step-up notes, extends loans

By Wendy Van Sickle

Columbus, Ohio, April 10 – Affinion Group Holdings, Inc. said it has completed its previously announced recapitalization transactions, including a note exchange offer and consent solicitation and an extension of its revolving credit facility and term loans.

The exchange offer 5 p.m. ET on April 5.

Holders of $670,326,317, or 98.4%, of Affinion Group, Inc.’s $681,548,667 of senior cash 12½%/PIK step-up to 15½% notes due 2022 tendered their notes in the offer to exchange them for shares of Affinion Holdings’ new class M common stock by the consent deadline, 5 p.m. ET on March 15, as reported previously.

In an update on Wednesday, Affinion said the total participation at the final expiry remained at 98.4%. Following the offer, about $10.7 million of the notes remain outstanding.

The offer opened on March 4, along with the related consent solicitation.

The amount of notes tendered for exchange by the consent deadline was sufficient to meet the 98% minimum exchange condition and for the success of the consent bid.

As a result of the completion of the exchange offer, Affinion Holdings issued 725,678 shares of new common stock in exchange for the validly tendered existing notes and 10,522,940 penny warrants to purchase up to 10,522,940 shares of new common stock.

Under the consent solicitation, Affinion sought approval of some amendments to the indenture governing the existing notes to eliminate substantially all of the restrictive covenants, among other changes.

Holders who tendered by the consent time received per $1,000 principal amount of existing notes, 14.672467 shares of Affinion Group Holdings, Inc. class M common stock and the right to participate in the related rights offering.

Holders who tendered after the consent deadline received 14.672467 shares of Affinion Group Holdings, Inc.'s class M common stock.

Also in connection with the launch of the exchange offer, Affinion Group commenced a rights offering giving eligible holders of existing notes the right to purchase at par up to $288 million principal amount of 18% senior PIK notes due 2024 of Affinion Group.

Affinion said subscriptions were received for about $280.2 million of new notes.

The remaining approximately $19.8 million of new notes available to be issued in the rights offering were purchased by investors. As a result of the completion of the rights offering, Affinion Group issued $357 million of new notes for a total cash purchase price of $300 million.

Holders tendering existing notes in the exchange offer had to also deliver consents to the proposed amendments. Approval of the proposed amendments required the consent of holders of at least a majority of the outstanding principal amount of the existing notes.

In Wednesday’s release, Affinion said, ‘The recapitalization significantly reduces debt, improves liquidity and enables the company to make continued investments in its core platform, content, delivery and analytics capabilities.”

Affinion is a Stamford, Conn., provider of marketing loyalty products.

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