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Affinion seeks to sell AD&D unit to cut debt, say sources: Reuters

Affinion Group Holdings Inc, a U.S. provider of loyalty programs and insurance products, is exploring a sale of its accidental death and dismemberment (AD&D) business as it seeks to trim its debt pile, people familiar with the matter said on Friday.

The move comes after Affinion refinanced most of its $1.8 billion in debt earlier this year, pushing back its maturity from 2018 to 2022. This bought time for Affinion but also created a significant burden in terms of interest payments, according to credit ratings agency Moody’s Investors Service Inc.

The sale process, which is being run by investment bank Morgan Stanley (MS.N), has attracted several private equity firms, and could value Affinion’s AD&D business at around $700 million, the sources said.

The sources asked not to be identified because the sale process is confidential. Affinion did not immediately respond to requests for comment. Morgan Stanley declined to comment.

Stamford, Connecticut-based Affinion is trying to find its footing after a debt restructuring in 2015 failed to relieve it from enough of its debt liabilities.

Prior to the 2015 restructuring, private equity firm Apollo Global Management LLC (APO.N) owned much of Affinion. Under the debt reorganization’s terms, the private equity firm gave up control to the company’s creditors.

AD&D is part of Affinion’s insurance solutions segment, which covers over 20 million Americans and also includes supplemental coverage for hospital care and life insurance, according to its website.

The AD&D unit generates 12-month earnings before interest, tax, depreciation and amortization (EBITDA) of between $70 million and $79 million, according to one of the sources.