LPL Financial firms spread on $580 million term at Libor plus 375 bps

By Sara Rosenberg

New York, May 24 - LPL Financial finalized pricing on its $580 million incremental term loan due in 2017 at Libor plus 375 basis points, the wide end of the initial Libor plus 350 bps to 375 bps talk, according to a market source.

As before, the loan includes a 1.5% Libor floor and was sold at an original issue discount of 99.

Proceeds from the new debt, which was marketed to new and existing lenders, will be used to take out the company's 10¾% senior subordinated notes.

In connection with the new deal, the company sought an amendment to its credit facility to allow for the incremental loan and to permit the repayment of subordinated debt with senior debt.

Also, the company extended $500 million of its roughly $817 million term loan D to 2015 from 2013.

The extended tranche was oversubscribed so accounts had to be cut back pro rata, the source remarked.

Pricing on the extended portion is Libor plus 275 bps, up from current pricing of Libor plus 175 bps. Furthermore, the extended debt has a 1.5% Libor floor, whereas the non-extended loan has no Libor floor.

LPL Financial did not need to get permission from lenders to extend its term loan D since an amendment was already completed last year allowing for maturity extensions.

Morgan Stanley and Bank of America are the lead banks on the deal.

Leverage is around 3.2 times. This transaction is basically a leverage-neutral deal.

LPL Financial is a business-to-business brokerage firm for independent financial advisors, banks and credit unions, and broker/dealers at financial services companies.

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