MoneyGram obtains $245 million second-lien term facility

By Rebecca Melvin

New York, May 8 – MoneyGram International Inc. has obtained a $245 million senior secured second-lien term facility, which was arranged by Bank of America, NA, according to an 8-K filing with Securities and Exchange Commission.

The interest is 13% annually.

BPC Lending I LLC, an affiliate of Beach Point Capital Management, has committed to provide $200 million of the facility, and the Carlyle Group, or an affiliate, will also participate in a portion.

The proceeds are expected to be used to prepay $245 million of debt outstanding under the first-lien term facility.

The closing is conditioned on MoneyGram refinancing or extending the maturity date under an existing senior secured first-lien revolving credit facility and senior secured first-lien term loan facility.

Upon closing of the second-lien term facility, the company would issue warrants to the lenders representing 8% of outstanding common stock, assuming full conversion of the company’s series D participating convertible preferred stock.

The company agreed to deliver a portion of the warrants in connection with the arrangement, representing 1.5% of the fully diluted common stock. The initial warrants are required to be delivered by the closing of the second-lien term facility or by July 8, and the company’s termination of the financing arrangement. In the event the second-lien term facility closes, each warrant would be exercisable, in whole or in part, at an exercise price equal to $0.01 per share following either (a) a change of control, (b) the repayment in full of all amounts outstanding under the facility, (c) the maturity date or (d) the occurrence and continuance of an event of default.

If the facility does not close, each initial warrant would be exercisable, in whole or in part, at an exercise price equal to $0.01 per share upon the earlier of (i) Nov. 7, 2019 and (ii) a change of control. All warrants would expire 10 years after the closing of the second-lien term facility.

The facility matures in six years after closing or 12 months following the maturity date of the refinanced or extended first-lien term facility, whichever comes first.

MoneyGram is a Dallas-based money transfer company.

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