April 12, 2017
Firm assists iPayment Holdings, Inc. and iPayment, Inc. in connection with an exchange offer, tender offer, and comprehensive refinancing.
On April 11, iPayment, Inc. (“iPayment”), a trusted provider of payment and processing solutions for small and medium-sized businesses, and its parent, iPayment Holdings, Inc. (the “Company”), completed a comprehensive refinancing of iPayment. The refinancing substantially deleveraged the Company, and enables the Company to materially expand its services, product offerings, and channel partnerships.
As part of the refinancing, the Company closed its previously announced exchange offer relating to its 9.50% Senior Secured Notes due 2019 with 94.7% of the Senior Secured Notes participating. Holders of the Senior Secured Notes received a $41 million cash payment, approximately $167 million of a new issue of preferred stock, and approximately 95% of the outstanding equity in the Company. The Company also consummated a tender offer to purchase its common stock, with 48.4% of the outstanding shares of Common Stock participating. Holders of common stock not participating in the tender offer also received a dividend of preferred stock.
New money financing for the comprehensive refinancing was provided by a $350 million Senior Secured First Lien credit facility led by JPMorgan Chase, comprised of $330 million in new term loans and a $20 million revolving credit liquidity facility, as well as $175 million in 10.75% Senior Secured Second Lien Notes Due 2024 issued on an exempt basis under Rule 144A.
In addition, the outstanding 9.50% Notes that were not tendered into the tender offer were amended to remove covenants and release liens pursuant to a Supplemental Indenture, and the outstanding 15% Notes of the Company and 10.25% Notes of iPayment were called for early redemption.
The multidisciplinary Willkie deal team was led by partners William Gump and Maurice Lefkort and included Corporate: associates Ted Powers, Erin Kinney, and David Blassberger; Litigation: partners Tariq Mundiya, Todd Cosenza and James Dugan and associates Emma James and Maxwell Bryer handled litigation that arose in connection with the refinancing; Partner William Stellmach assisted the company in connection with a legacy Department of Justice and SEC investigations.
The new money Senior Secured First Lien Credit Agreement financing was led by partner Michael Zinder, together with associates Jason Pearl and Rohit Sengupta. The offering of the Rule 144A Senior Secured Second Lien Notes was led by partner Cristopher Greer, together with associates Julian Golay and Christine Centola. The amendment of the existing non-exchanging notes and early redemption was led by partners Michael Zinder and Cristopher Greer, together with associates Jason Pearl and Rohit Sengupta. Collateral security matters were handled by Counsel Cindy Chernuchin and associate Shira Silver. Additional advice was provided in the following areas: Tax: Anthony Carbone and Kapiljeet Dargan; Compensation and Benefits: partner Michael Katz and associate Geri Anne McEvoy.
