Senior Notes from Dollar Fin

Dollar Financial Corporation (DLLR) said on Wednesday that it intends to offer $250 million aggregate principal amount of senior notes in a private offering through its indirect wholly owned subsidiary National Money Mart Company. 

The senior notes will be guaranteed on an unsecured basis by Dollar Financial and some of its current and future direct and indirect wholly owned U.S. and Canadian subsidiaries. The company intends to use net proceeds from the senior notes offering to finance the acquisition of Military Financial Services, LLC by its wholly owned subsidiary, Dollar Financial Group, Inc. 

The senior notes offering, which the company expects to start and close in Dec 2009, will be available only to qualified institutional buyers and certain offshore investors. 

Concurrent with the senior notes offering, the company said on the same day that it is seeking an amendment and extension of the terms for its revolving credit facilities along with its $286.2 million of Canadian term loans and $83.5 million in British term loans. The amendment would allow the extension of the maturity dates of a portion of Dollar's credit facilities to December 2014. 

Credit Suisse Securities (USA), LLC, a division of Credit Suisse Group (CS) and Wells Fargo Bank, National Association, a division of  Wells Fargo & Company (WFC) will take part in this amendment and extension transaction as Joint Lead Arrangers and Joint Book Runners. 

We think that both the senior notes offering and amendment of revolving credit facilities will increase the company’s financial flexibility. As a result, the company will be able to continue to further expand its global footprint and diversified business model. 

We remain concerned about the risks related to Dollar Financial’s tax strategies, extremely fragmented nature of business and international dependence. However, a solid liquidity position, exposure to a somewhat recession-proof sector and cost containment measures will drive future growth.

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