Virtu Seeks to Reprice KCG Deal’s Outstanding Loan, Prepays Additional $74m

In 2017, Virtu Financial has acquired rival KCG Holdings Inc. for $1.4 billion in cash.

US electronic market maker Virtu Financial Inc., which acquired KCG Holdings in a landmark deal last year, is seeking to reprice its existing senior secured term loan.

In addition, Virtu said that it intends to prepay an additional $74 million in principal of its 1st Lien Senior Secured Term Loan Facility, which downsizes the loan’s outstanding balance to $400 million from its original amount $1,150 million.

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In 2017, Virtu Financial acquired rival KCG Holdings Inc. for $1.4 billion in cash, as tough market conditions forced high-frequency traders to consolidate and rethink business strategies. The combined entity created a giant HFT firm responsible for around 20 percent of the volume in U.S. equities.

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Virtu financed the cash transaction and debt refinancing with new gross borrowings of $1.65 billion and the sale of $750 million of common stock. Virtu has entered into a commitment with J.P. Morgan Securities LLC, to provide up to $1.65 billion of debt financing for the transaction.

The term loans and revolving borrowings are currently priced at an interest rate of LIBOR + 325 for USD borrowings. The company hopes to reduce annual cash interest costs on its loans.

Virtu makes markets over 25,000 financial instruments, at over 235 venues, in 36 countries worldwide, continuously quoting buy and sell prices for others to trade against, profiting off the bid-offer spread, using high-frequency trading (HFT) strategies.

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