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GWG Holdings completes 1st stage of $695M strategic deal with Beneficient


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According to Market Intelligence, April 2023

GWG Holdings completes 1st stage of $695M strategic deal with Beneficient

GWG Holdings Inc. completed the initial closing of its $695 million strategic transaction with Beneficient Co. Group LP

The transaction is structured as a two-part closing. For the initial closing, $453 million in assets were exchanged among GWG Holdings, Beneficient and seller trusts. For the final closing, which is expected in the fourth quarter, an additional $242 million in assets will be exchanged.

GWG Holdings is issuing $292 million of its common stock to the seller trusts — which were formed to facilitate the transaction — at $10 per share, as well as $403 million in five-year GWG Holdings L-Bonds.

In exchange, GWG Holdings will receive a $50 million investment through the issuance of GWG Holdings series B preferred stock that is convertible into GWG Holdings common stock at $10.00 per share, a $200 million commercial loan receivable from Beneficient, and $445 million of Beneficient MLP units priced at $10.00 per unit.

The transaction is expected to significantly increase GWG Holdings' shareholder equity and diversify its balance sheet, among other benefits. For Beneficient, the transaction will add a life insurance class to its mix of alternative assets.

GWG Holdings purchases life insurance policies in the secondary market, while Beneficient provides lending, trust and liquidity products to mid-to-high net worth individual investors and small-to-medium institutional owners of professionally managed illiquid alternative investment assets.