GWG Holdings Inc. (Nasdaq: GWGH), a financial services firm based in Dallas, has launched a $2 billion L bond offering after raising $1 billion in sales in its previous bond offering.
Shares in the new offering are priced at $1,000 each and provide fixed interest payments, paid monthly.
The company said that it intends to use the net proceeds from the offering to grow its alternative asset exposure, primarily through investments in GWG subsidiary Beneficient in the form of equity investments or loans, and to meet other obligations, including debt obligations. The minimum investment in L bonds is 25 units, or $25,000.
“We believe the closing of our $1 billion L Bond offering demonstrates the confidence our investors have shown in our company even through the COVID-19 pandemic,” said Murray Holland, GWGH’s chief executive officer.
Emerson Equity LLC is serving as the managing broker-dealer for the offering, which is being sold through a network of participating dealers and licensed financial advisors and representatives.
The L bonds will be sold with varying maturity terms of two, three, five or seven years, as well as varying interest rates and frequency of interest payments. GWG will pay Emerson Equity a selling commission ranging from 0.75 percent to 5 percent of the principal amount of L bonds sold, depending on the maturity date.
Two-year L bonds have an interest rate of 5.5 percent, Three-year bonds have an interest rate of 6.25 percent, five-year bonds have an interest rate of 7.5 percent, and seven-year bonds have an interest rate of 8.5 percent.
In addition, the dealer manager and selling group members may receive up to 3 percent of the gross offering proceeds as additional compensation consisting of a 0.40 percent dealer-manager fee, up to a 1.00 percent reallowance to selling group members; an accountable expense allowance to be paid to the selling group members, which may include due diligence expenses; wholesaling fees, which may consist of commissions and non-transaction-based compensation of the wholesalers; and non-cash compensation.
The combined selling commissions and additional compensation will not exceed 8 percent of the total gross proceeds of the offering.
GWG Holdings, Inc. (Nasdaq: GWGH), through subsidiaries The Beneficient Company Group and GWG Life, owns and manages a portfolio of alternative assets that includes $2 billion in life insurance policy benefits and exposure to a loan portfolio secured by 118 alternative investment funds, as of March 31, 2020.