MoneyGram launches $650-$675 million term loan at Libor plus 550 bps

By Sara Rosenberg

New York, May 14 – MoneyGram International Inc. launched on Tuesday its $650 million to $675 million first-lien term loan (B2) due May 2023 with price talk of Libor plus 550 basis points with an original issue discount of 99, according to market sources.

The first-lien term loan has 101 soft call protection for one year and a first-lien leverage covenant, sources said.

Bank of America Merrill Lynch is the lead bank on the deal.

Commitments are due on May 22, sources added.

Proceeds will be used to amend and extend an existing first-lien term loan due March 2020.

Currently, there is about $900 million outstanding under the existing first-lien term loan, but the company will repay $245 million of the debt with proceeds from a $245 million senior secured second-lien term loan (Caa2/CCC+).

The second-lien term loan has an annual interest rate of 13%, a portion of which would be payable in kind at the company’s option, as well as provide for customary fees and an original issue discount.

Bank of America arranged the second-lien term loan. 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.

Closing on the second-lien loan is conditioned on MoneyGram refinancing or extending its existing senior secured revolving credit facility and first-lien term loan.

The second-lien loan would mature upon the earlier of six years after closing or 12 months following the maturity date of the refinanced or extended first-lien term loan.

Upon closing of the second-lien term loan, 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.

MoneyGram is a Dallas-based money transfer company.

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