Obra Capital, a portfolio company of RedBird Capital Partners and Reverence Capital Partners, completed a super priority secured debtor-in-possession credit and security agreement for GWG Holdings, a financial services firm based in Dallas.
On April 20, GWG Holdings and certain of its subsidiaries filed voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of Texas as part of a restructuring process intended to enable the company to enhance its liquidity and ability to meet its financial obligations.
Obra, through Vida Insurance Credit Opportunity Fund III and its related affiliates, agreed to provide a term loan credit facility in an initial aggregate principal amount of approximately $564 million and a revolving credit facility in an aggregate principal amount of up to $40 million.
“Our loan to GWG, secured by all assets of the debtors, including GWG’s life settlements portfolio and the equity interests of subsidiaries, was the culmination of an eight-month process during which Obra explored multiple structuring solutions to benefit both GWG stakeholders and our limited partners,” Blair Wallace, president and CEO of Obra Capital, said. “In connection with the transaction, Obra deployed proprietary underwriting and analytics, leveraging our deep experience in life settlements and insurance-linked special situations. This is the firm’s largest transaction in its 12-year history and we look forward to continuing to deploy capital in other situations where Obra has a significant edge in supporting counterparties and driving returns for our investors.”
As part of the agreement, GWG agreed that Obra’s wholly-owned subsidiary, Magna Servicing, will provide servicing for the GWG portfolio of life settlement assets. With this new servicing assignment, Magna expects to service more than $10 billion of life insurance policies for Obra and third-party investors.
Quinn Emanuel Urquhart & Sullivan and Proskauer Rose acted as legal counsel to Obra, while Moelis & Company acted as Obra’s financial advisor for this transaction.
