DFC Global extends exchange for 10˝% notes due 2020, ups consideration

By Wendy Van Sickle

Columbus, Ohio, Aug. 4 – DFC Global Corp. said wholly owned subsidiary DFC Finance Corp. is increasing the consideration offered in exchange for its 10˝% senior secured notes due 2020 and is again extending the deadline for holders to exchange their notes.

The exchange will now continue until midnight ET at the end of Aug. 17.

Previously, the exchange was extended to 5 p.m. ET on Aug. 5 from 5 p.m. ET on July 28. Settlement has been pushed back to Aug. 19 from Aug. 10.

Tendered notes may be withdrawn by the new offer expiration.

As of Aug. 3, holders had tendered for exchange $213.6 million principal amount, or 27%, of the $800 million outstanding notes, according to a company update. Of that amount, about $196 million had been tendered by an affiliate of Lone Star Funds.

As announced June 27, the company is offering in exchange up to $800 million principal amount of DFC Finance’s newly issued 12% senior secured pay-in-kind toggle notes due 2020 plus additional new notes to be issued for accrued interest.

The total exchange value will now be par for each $1,000 principal amount for notes tendered under the exchange. Previously, the exchange value was set to drop to $970 from par for each $1,000 principal amount after the early deadline of 5 p.m. ET on July 15, extended from July 11.

The company also will pay accrued interest.

DFC Global said holders are expected to tender an additional $380.2 million of notes under the revised offer. Under an agreement with consenting holders of the additional notes and an affiliate of Lone Star Funds, which already tendered $196 million of notes under the offer, the Lone Star affiliate and consenting lenders accepted certain restrictions on their ability to sell or otherwise dispose of existing notes for a lockup period that expires with the exchange offer.

The Lone Star affiliate also agreed, among other things, to contribute up to $75 million in equity from time to time to Sterling Mid-Holdings Ltd., the parent company of DFC Finance, and to use commercially reasonable best efforts to purchase in open market transactions or by tender offer an additional $50 million principal amount of new notes on or prior to Nov. 8 for a price not in excess of $650 per $1,000 principal amount.

The revised exchange offer is conditioned upon at least 90% of the existing notes being tendered under the offer or the waiver of that condition.

Holders must be qualified institutional buyers under Rule 144A or those defined as non-U.S. persons under Regulation S.

Global Bondholder Services Corp. (866 470-4500, 212 430-3774 or gbsc-usa.com/eligibility/DFC) is the information agent.

DFC is a non-bank provider of alternative financial services based in Malvern, Pa.

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