MoneyGram 2009 Annual Report Download - page 107

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Note 10 — Debt
Following is a summary of the outstanding debt at December 31:
2009 2008
Weighted- Weighted-
Average Average
(Amounts in thousands) Amount Interest Rate Amount Interest Rate
Senior Tranche A Loan, due 2013 $ 100,000 5.75% $ 100,000 6.33%
Senior Tranche B Loan, net of unamortized discount, due 2013 196,791 7.25% 233,881 7.78%
Senior revolving credit facility, due 2013 — — 145,000 6.27%
Second lien notes, due 2018 500,000 13.25% 500,000 13.25%
Total debt $ 796,791 $ 978,881
Senior Facility — On March 25, 2008, the Company's wholly owned subsidiary MoneyGram Payment Systems Worldwide, Inc.
("Worldwide") entered into a senior secured amended and restated credit agreement of $600.0 million with JPMorgan Chase Bank, N.A.
("JPMorgan") as Administrative Agent for a group of lenders (the "Senior Facility"). The Senior Facility was composed of a
$100.0 million tranche A term loan ("Tranche A"), a $250.0 million tranche B term loan ("Tranche B") and a $250.0 million revolving
credit facility, each of which matures in March 2013. Tranche B was issued by the Company at a discount of 93.5 percent, or
$16.3 million, which was recorded as a reduction to the carrying value of Tranche B and is being amortized over the life of the debt using
the effective interest method. A portion of the proceeds from the issuance of Tranche B was used to repay $100.0 million of the revolving
credit facility on March 25, 2008.
The Company may elect an interest rate for the Senior Facility at each reset period based on the United States prime bank rate or the
Eurodollar rate. The interest rate election may be made individually for each term loan and each draw under the revolving credit facility.
For Tranche A and the revolving credit facility, the interest rate is either the United States prime bank rate plus 250 basis points or the
Eurodollar rate plus 350 basis points. For Tranche B, the interest rate is either the United States prime bank rate plus 400 basis points or
the Eurodollar rate plus 500 basis points. Under the terms of the Senior Facility, the interest rate determined using the Eurodollar index
has a minimum rate of 2.50 percent. Fees on the daily unused availability under the revolving credit facility are 50 basis points.
Substantially all of the Company's non-financial assets are pledged as collateral for the loans under the Senior Facility, with the collateral
guaranteed by the Company's material domestic subsidiaries. The non-financial assets of the material domestic subsidiaries are pledged
as collateral for these guarantees.
During 2009, the Company elected the United States prime bank rate as its interest basis, as compared to the Eurodollar rate in 2008. In
2009, the Company repaid the full $145.0 million outstanding under the revolving credit facility. As of December 31, 2009, the Company
has $234.5 million of availability under the revolving credit facility, net of $15.5 million of outstanding letters of credit which reduce the
amount available under the revolving credit facility. In addition to $1.9 million of mandatory quarterly payments, the Company prepaid
$40.0 million of its Tranche B loan in December 2009. With this prepayment, all mandatory quarterly Tranche B payments have been
fully prepaid through maturity. Amortization of the debt discount on Tranche B of $4.8 million and $2.0 million during 2009 and 2008,
respectively, is recorded in "Interest expense" in the Consolidated Statements of Loss. The 2009 amortization includes a pro-rata write-
off of $1.9 million as a result of the Tranche B prepayment.
Second Lien Notes — As part of the recapitalization, Worldwide issued $500.0 million of senior secured second lien notes to Goldman
Sachs (the "Notes"), which will mature in March 2018. The interest rate on the Notes is 13.25 percent per year. Prior to March 25, 2011,
the Company has the option to capitalize interest at a rate of 15.25 percent. If interest is capitalized, 0.50 percent of the interest is payable
in cash and 14.75 percent is capitalized
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