GWG gets approval of Vida DIP financing, exclusivity extension

By Sarah Lizee

Olympia, Wash., Dec. 2 – GWG Holdings, Inc. got approval of replacement $630 million debtor-in-possession financing from Vida Insurance Credit Opportunity Fund LLL GP, LLC, according to an order filed with the U.S. Bankruptcy Court for the Southern District of Texas.

The replacement financing consists of a $590 million term loan and a $40 million revolver. The facility matures Oct. 15, 2023.

As background, on July 19, the court entered a final debtor-in-possession financing order and authorized the debtors to enter into a DIP option agreement, which provided a “one-way sale put option” that obligates the final DIP lenders to provide a $574 million stalking horse bid for the debtors’ policy portfolio if the debtors choose to sell it.

On Oct. 4, the debtors entered into an agreement with Vida Capital, which granted the debtors the option to refinance, rather than sell, the policy portfolio. If exercised, the Vida option would require Vida to provide a replacement DIP facility to refinance in full the existing DIP facility with Chapford SMA Partnership, LP due Dec. 31, and a senior secured exit facility of up to $630 million.

Ultimately, GWG chose the Vida option.

The court has not yet approved the exit financing.

Exclusivity extension

GWG also received an extension of its exclusive periods to file a Chapter 11 plan through Dec. 1 and solicit votes on the plan through Feb. 14, according to a separate order.

As reported, the company filed a plan on Thursday.

In its motion seeking the extension, the company said it needed the extra time to make progress with bondholders.

GWG is a life insurance company based in Dallas. The company filed bankruptcy on April 20, 2022 under Chapter 11 case number 22-90032.

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