Aretec/Cetera launches $400 million eight-year senior notes at 7½%; pricing Thursday

By Paul A. Harris

Portland, Ore., April 1 – Cetera Financial Group launched its $400 million offering of eight-year senior notes (Caa2/CCC) at 7½%, according to market sources.

The deal, which had been initially guided in the high 7% area and officially talked in the 7¾% area, is set to price on Thursday.

The offer was heard to be playing to $800 million of orders late Wednesday, a trader said.

Goldman Sachs & Co. LLC is the left bookrunner. UBS Securities LLC, Morgan Stanley & Co. LLC, Truist Securities Inc. and Deutsche Bank Securities Inc. are the joint bookrunners.

The Rule 144A and Regulation S for life notes become callable after three years at par plus 50% of the coupon.

The issuing entity will be special purpose vehicle Aretec Escrow Issuer Inc.

The El Segundo, Calif.-based service provider to a family of independent broker-dealers plans to use the proceeds plus borrowings under its first-lien credit facilities and cash from its balance sheet to finance the acquisition assets from Voya Financial Advisors Inc. and pay off the Cetera’s second-lien credit facility. Any remaining proceeds would be used for general corporate purposes, which may include debt repayment, capital expenditures, working capital and potential acquisitions and strategic transactions.

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