Virtu Financial, a technology-enabled market maker and liquidity provider to the global financial markets, refinanced its term loan, resulting in an extended maturity and lower cost.
J.P. Morgan acted as lead bookrunner and arranger in the transaction.
The new terms include a decrease in the interest rate of approximately 1.00% per annum and a new maturity of 2022. The new term loan has an interest rate of LIBOR+3.5% with a LIBOR floor of 0.75% and a maturity of 2022. Terms of Virtu’s prior term loan included an interest rate of LIBOR+4.25%, a LIBOR floor 1.00% and a maturity of 2019.
The transaction is anticipated to be net leverage neutral to Virtu as the additional principal will be used to offer to refinance the $34 million loan incurred in connection with the acquisition of a minority stake in SBI Japannext. Gross proceeds will also be used by Virtu to repay the principal of existing term loan and to pay fees and expenses related to the refinance transaction. If the lender in the SBI Japannext transaction declines the prepayment, the excess cash from the financing will be used for general corporate purposes.
The principal amount of the new term loan is $540 million. The bulk of the new term loan is due and payable upon maturity in 2022 with 1% of principal required to be amortized per year, as was the case with Virtu’s prior term loan. All other material terms remain the same as the prior term loan.
“We are pleased to announce this opportunistic refinancing of our term loan,” said Douglas Cifu, CEO of Virtu. “Our ability to extend the maturity of our debt to 2022 while meaningfully reducing the costs of the term loan demonstrates the confidence our investors have in the long term stability of our business model.”