GWG Holdings subsidiary gets $172.3 million 10-year credit facility

By Angela McDaniels

Tacoma, Wash., Sept. 19 – GWG Holdings, Inc. special-purpose subsidiary GWG DLP Funding IV, LLC entered into a $172.3 million credit facility due Sept. 14, 2026, according to an 8-K filing with the Securities and Exchange Commission.

The interest rate is 575 basis points over the greater of (a) Libor and (b) the Federal Funds rate plus 50 bps.

LNV Corp. is lender with CLMG Corp. as the administrative agent.

The borrower has granted a security interest in all of its assets. GWG Holdings’ equity ownership in GWG DLP Funding IV is collateral for the obligations of GWG Holdings under its L bonds.

The borrower must maintain a reserve account to pay anticipated servicing fees for maintaining the borrower’s pledged policies, debt service and reasonable administrative and third-party expenses identified under the agreement for 12 months. The initial amount set aside in the reserve account is $11.25 million.

GWG Holdings will use $81.5 million of the loan proceeds to reduce debt owed to DZ Bank AG Deutsche Zentral-Genossenschaftsbank. The company expects to use the remaining amounts to repay other short-term debt and to acquire additional life insurance assets.

GWG Holdings is a specialty finance company in the life insurance secondary market. It is based in Minneapolis.

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