Daily News: October 24, 2013

KCG Announces $200MM Repayment of First Lien Credit Facility

KCG Holdings announced the completion of a $200 million principal repayment of the $535 million first lien term loan under the company’s first lien senior secured credit facility. KCG entered into the credit facility on July 1, 2013 to fund the acquisition of Knight Capital Group.

Steve Bisgay, chief financial officer of KCG, said, “We’re pleased to have the financial flexibility to make such a significant initial paydown. The $200 million principal repayment will begin to reduce our future interest expense. We intend to continue aggressively paying down the debt incurred to finance the creation of KCG until we achieve the target capital structure for the firm.”

Under the terms of the credit facility, an amortization payment of $235 million is due on July 1, 2014, followed by amortization payments of $7.5 million each quarter beginning September 30, 2014 until maturity on December 5, 2017. Prepayments, however, are permitted at any time without premium or penalty except in connection with certain refinancings. The $200 million principal prepayment reduces the first $235 million amortization payment under the facility to $35 million, effective immediately.

The $200 million was drawn from approximately $117 million in cash held in a segregated account included in other assets and $83 million in available cash on the balance sheet. As previously disclosed, KCG secured the consents necessary from creditors to use the cash in the segregated account for the repayment. As of June 30, 2013, KCG had pro forma cash and cash equivalents of $726 million.