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JGWPT refinances credit agreement, trims margin over Libor to 600 bps
By Toni Weeks
San Luis Obispo, Calif., Dec. 9 - JGWPT Holdings Inc. indirect subsidiary Orchard Acquisition Co., LLC entered into a second amendment to its credit agreement on Dec. 6 to reduce pricing and provide for a prepayment on a term loan, according to a press release and an 8-K filing with the Securities and Exchange Commission.
The company reduced the applicable margin on initial term loans to 600 basis points from 750 bps and changed the interest rate floor to 2% from 1.5%.
The amendment also modified the call protection, extending the period through Feb. 7, 2015. After that, premiums of 103 through Feb. 7, 2016 and 101.5 through Feb. 7, 2017 are in effect for voluntary prepayments, a one-year extension in each case.
In connection with the amendment, Orchard made a repayment of $123 million on its credit agreement with proceeds from its initial public offering, which priced on Nov. 8. There was no prepayment penalty for the transaction, the filing noted.
The maturity date for the term loan remains February 2019, and no changes were made to the financial covenants or schedule amortization.
"Based on current market conditions, the repricing represents a reduction in interest expense of 200 bps and, when combined with the paydown, is expected to reduce annual cash interest payments by approximately $20 million," chief financial officer John Schwab said in the release.
Credit Suisse Securities (USA) LLC and Jefferies Finance LLC were joint lead arrangers for the repricing. Jefferies was also the administrative agent and collateral agent. Jefferies Group, Inc. was the swingline lender.
JGWPT is a Radnor, Pa.-based buyer of deferred payments and illiquid financial assets.
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