Affinion completes refinancing bid, extending debt maturities to 2022

By Devika Patel

Knoxville, Tenn., May 10 – Affinion Group, Inc. has extended its debt maturities to 2022 through a recapitalization and refinancing effort that left the company with a new credit facility and new senior unsecured notes.

With the strengthened balance sheet, the company plans to grow its loyalty and customer engagement business.

“We closed the recapitalization and refinancing transaction on May 10,” chief financial officer Greg Miller said on the company’s first quarter earnings conference call on Friday.

“We now have a term loan and revolver under our new credit facility that replaces our former credit facility, revolver and international notes.

“We also have new senior unsecured notes that replace the former senior unsecured notes.

“As part of the transaction, we will be retiring the remaining stub notes from the 2015 exchange over the next couple of months.

Despite the company’s debt position remaining roughly static, management believes that the transaction was beneficial, since Affinion may now focus on growth opportunities and operations rather than capital structure efforts.

“Today, our net debt position is roughly the same as it was on March 31,” Miller said.

“Maturities of our new debt instruments are extended to 2022 and our annual cash interest will be slightly lower.

“We see several benefits to the transaction, including:

“One: Cleaned up balance sheet, with maturity dates extended out to the year 2022.

“Two: Sufficient runway to continue to invest in and capitalize on significant growth opportunities in the loyalty and customer engagement business.

“And three: We can finally be focused on the business operations, rather than incremental capital structure efforts,” he said.

The company’s top executive mirrored Miller’s sentiments, saying that the transaction will fuel growth.

“We addressed our capital structure well in advance of our 2018 maturities through a transaction that we believe is beneficial to all constituents,” chief executive officer Todd H. Siegel said on the call.

“We are pleased to have accomplished this transaction that has several benefits.

“It provides us with the opportunity to continue to transition the business to a leading loyalty, customer engagement and insurance company.

“It provides us with sufficient runway to capitalize on growth opportunities across our core businesses and we also believe that a stronger balance sheet will improve our ability to retain and grow existing clients and continue winning new business,” Siegel said.

Adjusted EBITDA was $59.9 million in the first quarter, as compared to $59.5 million for the first quarter of 2016, an increase of 0.7%.

At March 31, Affinion had $751.8 million of first lien term loans outstanding, $425 million of second lien term loans outstanding, $474.7 million outstanding under its senior notes, $116.2 million outstanding under the Affinion International Holdings Ltd. cash/PIK senior notes and $22.6 million outstanding under the Affinion Investments, LLC senior subordinated notes.

At March 31, there were no borrowings against Affinion’s revolving credit facility and $69.2 million of the credit facility was available for borrowing.

At March 31, Affinion had $33.6 million of unrestricted cash on hand.

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

© 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.