Affinion Group Holdings, Inc. Announces Completion Of Its Recapitalization Transaction Including Exchange Offer, Consent Solicitation And Rights Offering

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Apr 11, 2019
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The Recapitalization Significantly Reduces Debt, Improves Liquidity and Enables the Company to Make Continued Investments in its Core Platform, Content, Delivery and Analytics Capabilities

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STAMFORD, Conn., April 10, 2019 /PRNewswire/ -- Affinion Group Holdings, Inc. ("Affinion Holdings" or the "Company") announced today that it and Affinion Group, Inc. ("Affinion Group") completed (1) the previously announced private exchange offer (the "Exchange Offer") and consent solicitation (the "Consent Solicitation") of Affinion Group's Senior Cash 12.5% / PIK Step-Up to 15.5% Notes due 2022 (the "Existing Notes") for shares of Affinion Holdings' new Class M Common Stock, par value $0.01 per share (the "Class M Common Stock"), which Class M Common Stock was converted immediately following the consummation of the Exchange Offer as a result of a merger with one of Affinion Holdings' wholly-owned subsidiaries into shares of common stock, par value $0.000001 per share, of Affinion Holdings (the "New Common Stock"), (2) the previously announced private rights offering (the "Rights Offering) of (a) $288.0 million principal amount of 18.0% Senior PIK Notes due 2024 (the "New Notes") of Affinion Group to eligible holders of Existing Notes and (b) $12.0 million principal amount of New Notes to Affinion Holdings' existing equityholders and (3) entry into the fifth amendment to Affinion Group's existing credit agreement (as amended, the "Amended Credit Agreement") to (a) obtain an extension of the maturity of revolving facility commitments and term loans and (b) to modify certain other provisions in the existing credit agreement. The Exchange Offer, the Consent Solicitation, the Rights Offering and the Amended Credit Agreement were part of a series of transactions approved by holders of a substantial majority of the Company's existing common stock and of Affinion Group's secured and unsecured debt, in order to effect a comprehensive recapitalization of the existing debt of Affinion Group (collectively, the "Recapitalization").

The Exchange Offer expired at 5:00 p.m., New York City time, on April 5, 2019 (the "Expiration Time"), and the deadline to participate in the Rights Offering was 5:00 p.m., New York City time, on March 22, 2019 (the "Subscription Deadline").

In the Exchange Offer, Affinion Holdings and Affinion Group accepted for exchange all Existing Notes validly tendered and not properly withdrawn at or prior to the Expiration Time. As of the Expiration Time, approximately $670.8 million aggregate principal amount of the Existing Notes (or approximately 98.4%) were validly tendered in the Exchange Offer. Upon closing of the Exchange Offer, there remained outstanding approximately $10.7 million aggregate principal amount of Existing Notes. As a result of the completion of the Exchange Offer, Affinion Holdings issued a total of 725,678 shares of New Common Stock in exchange for the validly tendered Existing Notes and 10,522,940 penny warrants (the "New Penny Warrants") to purchase up to 10,522,940 shares of New Common Stock.

In the Rights Offering, Affinion Holdings and Affinion Group accepted all valid subscriptions received at or prior to the Subscription Deadline. As of the Subscription Deadline, valid subscriptions were received for approximately $280.2 million aggregate principal amount of New Notes. The remaining approximately $19.8 million aggregate principal amount of New Notes available to be issued in the Rights Offering were purchased by affiliates of Elliott Management Corporation, Metro SPV LLC, an affiliate of ICG Strategic Equity Advisors LLC, Mudrick Capital Management, LP, affiliates of Empyrean Capital Partners, L.P. and Corbin Capital Partners, L.P. (collectively, the "Investors") pursuant to the amended and restated investor purchase agreement, dated as of March 4, 2019, previously entered into by Affinion Holdings, Affinion Group and the Investors. As a result of the completion of the Rights Offering, Affinion Group issued $357.0 million aggregate principal amount of New Notes inclusive of fees, for an aggregate cash purchase price of $300.0 million.

In addition, based on the completion of the Exchange Offer, the supplemental indenture evidencing certain amendments to the indenture governing the Existing Notes (the "Amendments") previously executed by Affinion Group and the trustee are now operative. The Amendments eliminate substantially all of the restrictive covenants, make amendments to certain existing terms, and eliminate certain events of default and related provisions contained in the indenture governing the Existing Notes.

This press release is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell any securities. The Exchange Offer, Consent Solicitation and Rights Offering are being made and the Class M Common Stock, New Common Stock, New Penny Warrants and New Notes are being offered only to Eligible Holders. The Class M Common Stock, New Common Stock, New Penny Warrants and New Notes have not been registered under the Securities Act or under any state securities laws, and the Class M Common Stock, New Common Stock, New Penny Warrants and New Notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act, and accordingly, are subject to significant restrictions on transfer and resale as more fully described in the Offering Memorandum, the Letter of Transmittal and the Subscription Form. The Exchange Offer, Consent Solicitation and Rights Offering and the issuance of the Class M Common Stock, New Common Stock, New Penny Warrants and New Notes are being made only pursuant to the terms and subject to the conditions set forth in the Offering Memorandum, the Letter of Transmittal and the Subscription Form.

About Affinion Group
Affinion is one of the world's leading loyalty and customer engagement solutions companies servicing over 68.7 million consumers with approximately 2,900 client partner relationships and over 40 years of experience as of December 31, 2018. We design, administer and fulfill loyalty and customer engagement programs that strengthen and expand the value of relationships for our leading clients around the globe, including many of the largest and most respected companies in the financial services, retail, travel, and internet commerce sectors. Based in Stamford, CT, the Company has approximately 3,100 employees located across the globe. For more information, visit www.affinion.com.

Forward-Looking Statements
This press release may contain "forward-looking" statements as defined by the Private Securities Litigation Reform Act of 1995 or by the U.S. Securities and Exchange Commission (SEC) in its rules, regulations and releases. These statements include, but are not limited to, the ability to complete the Exchange Offer and the Rights Offering, discussions regarding industry outlook, Affinion Holdings and Affinion Group's expectations regarding the performance of its business, its liquidity and capital resources, its guidance for 2018 and the other non-historical statements. These statements can be identified by the use of words such as "believes" "anticipates," "expects," "intends," "plans," "continues," "estimates," "predicts," "projects," "forecasts," and similar expressions. All forward-looking statements are based on management's current expectations and beliefs only as of the date of this press release and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those discussed in, or implied by, the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, risks related to general economic and business conditions and international and geopolitical events, a downturn in the credit card industry or changes in the techniques of credit card issuers, industry trends, foreign currency exchange rates, the effects of a decline in travel on the Company's travel fulfillment business, termination or expiration of one or more agreements with its marketing partners or a reduction of the marketing of its services by one or more of its marketing partners, the Company's substantial leverage, restrictions contained in its debt agreements, its inability to compete effectively, and other risks identified and discussed from time to time in reports filed by Affinion Holdings with the SEC, including Affinion Holdings' most recent Annual Report on Form 10-K for the year ended December 31, 2017 and Quarterly Reports on Form 10-Q for the quarters ended March 31, 2018, June 30, 2018 and September 30, 2018. Readers are strongly encouraged to review carefully the full cautionary statements described in these reports. Except as required by law, Affinion Holdings and Affinion Group undertake no obligation to revise or update publicly any forward-looking statements to reflect events or circumstances after the date of this press release, or to reflect the occurrence of unanticipated events or circumstances.

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SOURCE Affinion Group Holdings, Inc.

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