RLPC-WorldPay seeks additional $1bn loan and disposal of US ops

Wed Mar 20, 2013 12:56pm EDT

* Dividend to total 340 mln stg

* Junior debt repayment totalling 343 mln stg

* Proceeds of US sale could fund second dividend payment

By Claire Ruckin

LONDON, March 20 (Reuters) - British payment processing company WorldPay is seeking to raise a new 700 million pound-equivalent ($1 billion) loan to be used in part to pay a dividend to private equity owners which are also looking to sell WorldPay's U.S. business, bankers said.

Advent and Bain acquired WorldPay in 2010 for around 2 billion pounds backed by 970 million pounds of debt, according to Thomson Reuters LPC data.

They now want to conduct a dividend recapitalisation - a process that sees more debt added to the existing borrowings and a dividend taken from it, bankers said.

Goldman Sachs, Morgan Stanley and RBS are running the process, which will see a new 700 million pound equivalent term loan raised, bankers said.

Around 340 million pounds of the new term loan will be used to pay a dividend and the rest will be used to repay an expensive 343 million pound mezzanine loan that was put in place to back the 2010 buyout, bankers added.

The new 700 million term loan will mature in 2019 and be denominated in sterling, euros and dollars which will pay an interest margin of 475 bps over Libor, 425 bps over Euribor and 400 bps over Euribor respectively. The mezzanine debt currently pays 1,200 bps, LPC data shows.

By raising the new loan, leverage on the company will increase to around 5 times its EBITDA from a current level of 3.7 times, bankers said.

Loan investors in WorldPay need to approve an amendment to allow the company to raise the additional debt and pay a dividend.

Lenders are also being asked for permission to allow WorldPay to sell its U.S. operation, which makes up a third of WorldPay's business, and have flexibility with the proceeds of the sale. The sale proceeds are expected to be used to pay down debt and to pay a second dividend to Advent and Bain, bankers added.

A lender meeting is taking place in New York on Thursday and in London on Friday.

Lenders are being offered a fee of 35 bps to approve the amendment and commitments are due April 5. Commitments for the new term loan are due April 3.

"When Advent and Bain bought the company in 2010 they put in about 820 million pounds of equity so even with a 340 million pound dividend they will still have a lot of skin in the game. It is a strong business that has performed well and selling the U.S. business will allow them to focus on their core market," one of the bankers said.

The U.S. payments business is ranked around eleventh in the U.S. market and will be seen as an attractive opportunity for a rival to buy it to gain market share, bankers said.

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