Virtu Financial, Inc. Announces Pricing of Opportunistic Refinancings
Virtu Financial has announced the pricing of its $500 million senior notes at 7.50% due 2031 and allocated new senior secured first lien credit facilities, including a $1,245 million term loan and a $300 million revolving credit facility. These initiatives, set to close around June 21, 2024, aim to repay existing debt, lower interest expenses by approximately $2 million annually, and extend debt maturities. The new term loans offer a reduced interest rate of SOFR plus 2.75%. The notes will be guaranteed by Virtu Financial's subsidiaries and are being offered to qualified institutional buyers.
- Pricing of $500 million senior notes at 7.50% due 2031.
- Allocation of $1,245 million term loan and $300 million revolving credit facility.
- Reduction of interest rate on new term loans to SOFR plus 2.75%.
- Expected annual cash interest savings of approximately $2 million.
- Extended debt maturities and diversified capital structure.
- No material increase in debt from these transactions.
- Notes bear a high-interest rate of 7.50% per annum.
- The transaction is dependent on closing conditions which may not be met.
- Notes and new credit facilities are not registered under the Securities Act.
- Possible market for the notes due to their private offering nature.
Insights
Virtu Financial's opportunistic refinancing move, featuring a
From a retail investor perspective, these actions illustrate Virtu's proactive management of their financial obligations and their strategy to stabilize and potentially improve their profitability. The fixed interest rates on the notes at
However, the high interest rate on the new notes could be interpreted as an indicator of perceived risk. Investors should weigh the benefits of lower annual interest expense against the longer-term obligation of high-interest debt.
Virtu’s strategy to issue new senior first lien notes and secure new credit facilities is a classic example of refinancing to take advantage of better terms. By issuing notes at
From an investor's point of view, these refinancings should be seen as a positive step towards long-term financial health. However, the high fixed rate on the notes signals a premium for risk, which could be due to market conditions or specific risks associated with Virtu. It's important to monitor how the market responds to these instruments and any changes in Virtu’s credit ratings following this announcement.
Understanding the nuances of these debt instruments is essential. The SOFR plus
NEW YORK, June 13, 2024 (GLOBE NEWSWIRE) -- Virtu Financial, Inc. (Nasdaq: VIRT) (“Virtu”) announced today that its subsidiaries, VFH Parent LLC (the “Issuer”) and Valor Co-Issuer, Inc. (collectively with the Issuer, the “Issuers”), priced their previously announced private offering of
The notes will bear interest at a rate equal to
The notes will be fully and unconditionally guaranteed on a senior secured first-lien basis by Virtu Financial LLC (“Virtu Financial”) and each of Virtu Financial’s existing and future wholly owned domestic subsidiaries (other than the Issuers) that guarantee, or are borrowers under, the amended credit facilities. The notes offering and the amended credit facilities are expected to close on or about June 21, 2024, subject to customary closing conditions. The consummation of the notes offering is not contingent upon the closing of the amended credit facilities. The closing of the amended credit facilities is not contingent upon the consummation of the notes offering.
The notes have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state or other jurisdiction, and may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from such registration requirements. Accordingly, the notes are being offered and sold only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain non-U.S. persons in transactions outside the United States in reliance on Regulation S under the Securities Act.
This press release does not constitute an offer to sell or a solicitation of an offer to buy, nor will there be any sale of, the notes in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.
About Virtu Financial, Inc.
Virtu is a leading financial services firm that leverages cutting-edge technology to provide execution services and data, analytics and connectivity products to its clients and deliver liquidity to the global markets. Leveraging its global market making expertise and infrastructure, Virtu provides a robust product suite including offerings in execution, liquidity sourcing, analytics and broker-neutral, multi-dealer platforms in workflow technology. Virtu product offerings allow clients to trade on hundreds of venues across 50+ countries and in multiple asset classes, including global equities, ETFs, foreign exchange, futures, fixed income and myriad other commodities. In addition, Virtu’s integrated, multi-asset analytics platform provides a range of pre- and post-trade services, data products and compliance tools that clients rely upon to invest, trade and manage risk across global markets.
Cautionary Note Regarding Forward-Looking Statements
This press release may contain “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements regarding our business that are not historical facts are forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by which, such performance or results will be achieved. Virtu assumes no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information, and if Virtu does update one or more forward-looking statements, no inference should be drawn that Virtu will make additional updates with respect thereto or with respect to other forward-looking statements. Forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and is subject to risks and uncertainties, some or all of which are not predictable or within Virtu’s control, that could cause actual performance or results to differ materially from those expressed in the statements. Those risks and uncertainties include, without limitation: risks relating to fluctuations in trading volume and volatilities in the markets in which we operate; the ability of our trading counterparties, clients, and various clearing houses to perform their obligations to us; the performance and reliability of our customized trading platform; the risk of material trading losses from our market making activities; swings in valuations in securities or other instruments in which we hold positions; increasing competition and consolidation in our industry; the risk that cash flow from our operations and other available sources of liquidity will not be sufficient to fund our various ongoing obligations, including operating expenses, short-term funding requirements, margin requirements, capital expenditures, debt service and dividend payments; potential consequences of recent SEC proposals focused on equity markets which may, if adopted, result in reduced overall and off-exchange trading volumes and market making opportunities, impose additional or heightened regulatory obligations on market makers and other market participants, and generally increase the implicit and explicit cost as well as the complexity of the U.S. equities eco-system for all participants; regulatory and legal uncertainties and potential changes associated with our industry, particularly in light of increased attention from media, regulators and lawmakers to market structure and related issues including but not limited to the retail trading environment, wholesale market making and off exchange trading more generally and payment for order flow arrangements; potential adverse results from legal or regulatory proceedings; our ability to remain technologically competitive and to ensure that the technology we utilize is not vulnerable to security risks, hacking and cyber-attacks; risks associated with third party software and technology infrastructure. For a discussion of the risks and uncertainties which could cause actual results to differ from those contained in forward-looking statements, see Virtu’s Securities and Exchange Commission filings, including but not limited to Virtu’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed with the SEC.
Contacts:
INVESTOR & MEDIA RELATIONS
Andrew Smith
Investor_relations@virtu.com
media@virtu.com
FAQ
What are the details of Virtu Financial's new senior notes offering?
What are the terms of Virtu Financial's new credit facilities?
How will Virtu Financial use the proceeds from the new term loans and notes?
What are the expected financial benefits of Virtu Financial's refinancing?
When are the notes offering and the new credit facilities expected to close?
How will the new term loans affect Virtu Financial's interest rates?
Who will guarantee Virtu Financial's new senior notes?
