MoneyGram 2007 Annual Report Download - page 49

Table of Contents
control. The Series B Preferred Stock will vote as a class with the common stock and will have a number of votes equal to the number of
shares of common stock issuable if all outstanding shares of Series B Preferred Stock were converted plus the number of shares of
common stock issuable if all outstanding shares of Series B-1 Preferred Stock were converted into Series B Preferred Stock and
subsequently converted into common stock.
Rights Agreements — As part of the Capital Transaction, we amended our Rights Agreement with Wells Fargo Bank, N.A. as rights
agent, to exempt the issuance of securities to the Investors and their affiliates from the Rights Agreement.
Registration Rights — As part of the Capital Transaction, we entered into a Registration Rights Agreement with the Investors. Under the
terms of the Registration Rights Agreement, after a specified holding period, we must promptly file a shelf registration statement with the
SEC relating to securities held by the Investors. We are generally obligated to keep the shelf registration statement effective for up to
15 years or, if earlier, until all the securities owned by the Investors have been sold. The Investors are also entitled to five demand
registrations and unlimited piggyback registrations.
Senior Credit Facility — As part of the Capital Transaction, our wholly owned subsidiary MoneyGram Payment Systems Worldwide,
Inc. ("Worldwide") entered into a senior credit facility (the "Senior Facility") of $600.0 million with various lenders and JPMorgan Chase
Bank, N.A ("JPMorgan"), as Administrative Agent for the lenders. The Senior Facility amended and restated the $350.0 million
Amended and Restated Credit Agreement, dated as of June 29, 2005, among the Company and a group of lenders and includes an
additional $250.0 million term loan. In connection with this transaction, the Company terminated its $150.0 million 364-Day Credit
Agreement with JPMorgan.
The Senior Facility includes $350.0 million in two term loan tranches and a $250.0 million revolving credit facility. Tranche A of the
term loans is for $100.0 million and tranche B is for $250.0 million. Tranche B was issued at a discount of 93.5 percent, or $16.3 million.
The interest rate applicable to tranche A and the revolving credit facility is the Eurodollar rate plus 350 basis points. The interest rate
applicable to tranche B is the Eurodollar rate plus 500 basis points. The maturity date of the Senior Facility is March 2013. Fees on the
daily unused availability under the revolving credit facility are 50 basis points.
At March 25, 2008, we had outstanding borrowings under the Senior Facility of $495.0 million.
There is a prepayment premium on the tranche B term loan of two percent during the first year and one percent during the second year of
the Senior Facility. Loans under the Senior Facility are secured by substantially all our non-financial assets and are guaranteed by our
material domestic subsidiaries, with such guarantees secured by the non-financial assets of the subsidiaries. Borrowings under the Senior
Facility are subject to various covenants, including limitations on: use of proceeds from borrowings under the Senior Facility; additional
indebtedness; mergers and consolidations; sales of assets; dividends and other restricted payments; investments; loans and advances and
transactions with affiliates. The Senior Facility also has certain financial covenants, including an interest coverage ratio and a senior
secured debt ratio. Compliance with such financial covenants will not be required until the fiscal quarter ending March 31, 2009. Under
the Senior Facility, we must maintain a minimum interest coverage ratio of 1.5:1 from March 31, 2009 through September 30, 2010,
1.75:1 from December 31, 2010 through September 30, 2012 and 2:1 from December 31, 2012 through maturity. We are not permitted to
have a senior secured debt ratio in excess of 6.5:1 from March 31, 2009 through September 30, 2009, 6:1 from December 31, 2009
through September 30, 2010, 5.5:1 from December 31, 2010 through September 30, 2011, 5:1 from December 31, 2011 through
September 30, 2012 and 4.5:1 from December 31, 2012 through maturity. The Senior Facility also contains a financial covenant requiring
us to maintain at least a 1:1 ratio of certain assets to outstanding payment service obligations.
Second Lien Notes — As part of the Capital Transaction, Worldwide issued Goldman Sachs $500.0 million of senior secured second lien
notes (the "Notes"), which will mature in March 2018. The interest rate on the Notes is 13.25 percent per year unless interest is
capitalized, in which case the interest rate increases to 15.25 percent. Prior to March 25, 2011, we have the option to capitalize interest of
14.75 percent, but must pay in cash 0.50 percent of the interest payable.
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