GFI Holdco debt commitment changed to include second-lien term loan

By Sara Rosenberg

New York, Dec. 3 – GFI Holdco Inc. revised the loan commitment for its acquisition of GFI Group’s wholesale brokerage and clearing businesses to include an up to $95 million six-year second-lien term loan, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

Pricing on the second-lien term loan is expected initially at Libor plus 1,250 basis points with a 1% Libor floor, and there will be 101 call protection for one year. Pricing will then increase to Libor plus 1,500 bps with a 1% Libor floor after one year.

The company still has a commitment for a $225 million five-year senior secured term loan; however, the first-lien term loan is now expected to be priced at Libor plus 850 bps with a 1% Libor floor and have call protection of 103 in year one, 102 in year two and 101 in year three. Pricing will decrease by 200 bps upon the repayment of the second-lien term loan.

By comparison, the original commitment letter had the first-lien term loan expected at Libor plus 525 bps with a 1% Libor floor and the call protection anticipated to be a 101 soft call for one year.

Amortization on the first-lien term loan is 2.5% in year one and 5% per year thereafter.

Jefferies Finance LLC is the lead bank on the deal.

Under a revised acquisition agreement, the private consortium of GFI Group management, led by current executive chairman Michael Gooch, chief executive officer Colin Heffron and managing director Nick Brown, will buy GFI Group’s wholesale brokerage business for $254 million, up from $165 million in cash offered in July, along with the assumption, at closing, of about $72 million of unvested deferred compensation and other liabilities.

Closing is expected in early 2015.

GFI is a New York-based provider of trading technologies and support services.

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