GWG gets OK of $65 million DIP loan with new lender, lower interest

By Sarah Lizee

Olympia, Wash., July 19 – GWG Holdings, Inc. received court approval of a new $65 million debtor-in-possession financing via Chapford SMA Partnership, LP as administrative and collateral agent, according to an order filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the company initially sought approval of a $65 million DIP facility from National Founders LP. This facility was set to mature on Oct. 20 and to bear interest at adjusted term SOFR, which was SOFR with a 1% floor and 0.11448%, plus 1,000 basis points per annum.

However, the court had expressed some concerns over the financing and opened an invitation for financing on better terms.

The Chapford facility will bear interest at 10% and mature on Dec. 31.

The company had already received interim access to the National Founders facility, but GWG said the new facility effectively allows Chapford to “step into the shoes” of the previous lender, and the interim DIP amount will be refinanced.

The company said a key component that made the terms of the new DIP facility better than other proposals is that if the debtors choose to pursue a sale of its life insurance policy portfolio, the debtors are required to select Chapford as the stalking horse bidder with a purchase price of $610 million, and Chapford is obligated to close on the sale if no other topping bidders materialize.

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

© 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.