MoneyGram International, a leader in the payments industry, has announced plans for a private offer of $415 million of senior secured notes that would be due in 2026 as it pushes ahead with its plans to raise funds and reduce its debts.
The company has been on a fundraising spree over the last few months and the funds so far have been well utilized to repay some of its long-standing debts with banks and other financial institutions as it seems to be in a hurry to clear up its debts. Even in this case, the company has announced that it would be using the net proceeds from this offering, and the borrowing that it plans to make concurrently with the closure of the offering would be used to fully prepay the indebtedness of its existing senior credit facilities.
The company also said that the notes would be offered in the USA only to persons who are qualified to be institutional buyers according to Rule 144A of the Securities Act 1933. This makes it very clear that this offering is only for entities that are professional traders and buyers and this is not for the general public to venture into. This announcement is only a general declaration of what the company plans to do and the rules and the regulations concerning this offering are likely to be something that is agreed upon between the company and the buyers of the notes through a separate memorandum.
The company had recently raised $100 million from the stock market by selling off some of the shares that it had been holding for a long. It had declared that this was being done to repay some of the outstanding debt and to plan, the company was able to raise the funds and it had also managed to repay the debts as planned. Though the company has not specified why it seems to be in a hurry to repay the debts that have been outstanding for long, the investors should be happy that the debts are being repaid through various means and this is likely to make the company stable and profitable in the long run.
The payments industry has been witnessing strong growth over the last few months and this is expected to continue in the coming years as well. This would help MoneyGram to sit in a comfortable space within the payments industry and this is also proved by the fact that it has been seeing growing transaction volumes over the last few months which are expected to grow even further.