Loyalty Ventures plans $675 million term loan for spinoff

By Sara Rosenberg

New York, Sept. 22 – Loyalty Ventures Inc. (LoyaltyOne) plans on getting a new roughly $675 million term loan to help fund its spinoff from Alliance Data Systems Corp., according to a 10-12B/A filed with the Securities and Exchange Commission on Tuesday.

The company also intends to enter into a $150 million revolving credit facility to support the business after the spinoff but does not expect to draw on this facility immediately.

Proceeds from the term loan 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 Loyalty Ventures. 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.

Morgan Stanley is serving as financial adviser for the transaction.

Loyalty Ventures 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.

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