I think the recap closed.
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Ailing money-transfer firm MoneyGram International Inc. completed a recapitalization with investors led by Thomas H. Lee Partners LP and Goldman Sachs Group Inc.'s Goldman Sachs & Co.
The Minneapolis payment services company, which has been hurt by losses on mortgage-related investments, said the investors purchased $760 million of Series B and Series B-1 preferred stock, convertible into 79% of the common equity of the company at an initial price of $2.50 a share.
MoneyGram also received $500 million in debt financing from affiliates of Goldman Sachs and an additional $250 million in senior debt financing.
The company now has $100 million of revolving credit available under its previously existing $350 million credit agreement, which has been modified to provide for an extended term.
Chief Executive Philip W. Milne said, "With the completion of this important transaction, MoneyGram now has the financial resources to support our customers and their growth plans."
MoneyGram, which provides bill payment services at more than 3,500 Wal-Mart Stores Inc. stores, added Scott L. Jaeckel and Seth W. Lawry, principals of Thomas H. Lee Partners, to its board of directors. Jess Hay, Albert M. Teplin and Othon Ruiz-Montemayor will continue as members of the board along with Milne, chairman and CEO.
After the deal receives regulatory approval, Thomas H. Lee Partners is expected to appoint a majority of the board of directors.
Before the recapitalization, MoneyGram completed the sales of certain portfolio assets, resulting in a loss of about $1.6 billion.
The terms of MoneyGram's deal with investors were revised earlier this month. The prior deal, agreed to in February, had the group investing up to $775 million in preferred stock, which would have converted into a 63% stake. The conversion price also was halved from $5.
Write to Kathy Shwiff at kathy.shwiff@dowjones.com
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