KCG's 8¼% noteholders consent to use of available cash to buy 3.5% convertibles, prepay loan

By Marisa Wong

Madison, Wis., Oct. 16 - KCG Holdings, Inc. said it received consents from holders of $304,022,000 principal amount, or 99.68%, of its 8¼% senior secured notes due 2018 as of 5 p.m. ET on Oct. 14, the expiration of its previously announced consent solicitation.

After receiving consents from holders of a majority of the outstanding notes, needed to amend the indenture dated June 5, 2013 governing the 8¼% notes, the company entered into a third supplemental indenture on Tuesday.

The supplemental indenture amends the original indenture to allow the company to purchase, redeem or repay the 3.5% cash convertible senior subordinated notes due 2015 issued by Knight Capital Group, Inc. at any price, including at a premium or at a discount, with any available cash.

These amendments allow the company to reduce its overall level of debt and debt service costs, according to a previous 8-K filing.

As noted before, the consent solicitation was conditioned on the company amending its credit agreement dated July 1, 2013 with Jefferies Finance LLC as documentation agent, administrative agent, collateral agent and syndication agent and Jefferies Finance LLC and Goldman Sachs Bank USA as joint lead arrangers and joint book managers. On Tuesday the company entered into a first amendment to the credit agreement.

The amendment requires the company to prepay a portion of borrowings on the first business day after the 60th day from Oct. 15 by using any remaining funds on deposit in a cash collateral account previously set aside to purchase the 3.5% convertible notes. The company may also prepay a portion of borrowings out of collateralized cash proceeds prior to the cash collateral prepayment date by giving at least three business days' notice.

In addition, the credit agreement amendment also permits the company to purchase, redeem or repay the 3.5% convertible notes at any price with any available cash.

KCG began the consent solicitation on Sept. 30. KCG offered a consent fee of $5.00 for each $1,000 principal amount of notes to holders of record as of 5 p.m. ET on Sept. 27.

Jefferies LLC was the solicitation agent (contact Justin Polselli at 888 708-5831 or 203 363-8273). The information and tabulation agent was i-Deal LLC (contact Aaron Dougherty at 888 593-9546, 212 849-3880 or consent@ipreo.com).

KCG is a Jersey City, N.J.-based financial services firm.

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