LoyaltyOne plans new debt financing with spinoff from Alliance

By Sara Rosenberg

New York, May 12 – LoyaltyOne (Spinco) plans on getting new debt financing in connection with its spinoff from Alliance Data Systems Corp., according to a news release.

Proceeds from the debt will be used to pay a dividend to Alliance Data, which will use all of the net proceeds to retire a portion of its corporate debt.

The transaction will be in the form of a distribution to Alliance Data stockholders of about 81% of the shares of Spinco, a new entity holding LoyaltyOne. Alliance Data will retain around 19% of the shares of Spinco at the time of the distribution, with the intent to monetize that stake as appropriate to provide for incremental corporate debt reduction at Alliance Data.

Closing is expected by the end of the year, subject to customary conditions, including final approval by Alliance Data’s board of directors, receipt of a favorable tax ruling from the Internal Revenue Service, approval for listing of Spinco’s common stock on a national securities exchange and completion of any necessary financings.

Morgan Stanley is serving as financial adviser for the transaction.

LoyaltyOne is comprised of Canadian Air Miles Reward Program, a loyalty program in Canada, and Netherlands-based BrandLoyalty, a provider of tailor-made campaign-based loyalty solutions for high frequency retailers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.