S&P puts Advisor on negative watch

S&P said it placed its B+ ratings for Advisor Group Holdings Inc. on CreditWatch with negative implications, following the announcement that the company entered a pact to acquire Ladenburg Thalmann.

“The CreditWatch placement reflects our expectation that Advisor Group’s mostly debt-financed acquisition of Ladenburg Thalmann could potentially weaken the company’s credit metrics, particularly its debt service capacity. The transaction is expected to include $324 million of unsecured debt assumed from Ladenburg Thalmann. Additionally, Advisor Group has obtained financing commitments from several banks for a $775 million secured bridge facility. As of now, the remainder of the acquisition is expected to be funded with approximately $280 million of new equity from the company’s sponsor, Reverence Capital,” said S&P in a press release.

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