MoneyGram talks upsized $450 million 9% seven-year secured notes at 83 to yield 12.742%

By Paul A. Harris

Portland, Ore., May 31 – A bond offering backing the buyout of MoneyGram International Inc. by Madison Dearborn Partners upsized to $450 million from $400 million on Wednesday, according to market sources.

Official talk on the Mobius Merger Sub, Inc. seven-year senior secured notes (B2/B/B+) specifies a 9% coupon at 83 to yield 12.742%, nearly 175 basis points beyond the wide end of early guidance in the 10˝% to 11% area.

In addition to the big rate concession came covenant changes, which primarily bear upon how the company may disburse cash and incur additional debt.

Books close at 2:30 p.m. ET on Wednesday, and the bonds are set to price and allocate shortly thereafter.

The notes are non-callable for three years.

Goldman Sachs & Co. LLC (lead left), Barclays, Deutsche Bank Securities Inc. and Wells Fargo Securities LLC are bookrunners for the Rule 144A and Regulation S for life offering.

With the $50 million upsizing of the bond offering, the concurrent bank loan was downsized to $450 million from $500 million.

Bond and loan proceeds, together with cash and equity contributions, will be used to fund the cash consideration of Madison Dearborn Partners’ buyout of MoneyGram, to prepay or redeem existing debt and for general corporate purposes.

Mobius is a special purpose vehicle created for purposes of financing the buyout.

MoneyGram is a Dallas-based digital P2P payments company.

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