LPL Financial seeks $580 million incremental term loan, amend/ extend

By Sara Rosenberg

New York, May 12 - LPL Financial is in market with a $580 million incremental term loan and an amend and extend proposal for its existing credit facility, according to a market source.

The incremental term loan due in 2017 is being talked at Libor plus 350 basis points to 375 bps with a 1.5% Libor floor and an original issue discount of 99, the source said.

Proceeds from the new debt, which is being 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 is looking to amend its credit facility to allow for the incremental loan and to permit the repayment of subordinated debt with senior debt.

Also, the company is asking to extend up to $500 million of its roughly $817 million term loan D to 2015 from 2013, the source remarked.

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

LPL Financial does 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 that was launched with a conference call on Tuesday.

Commitments towards the new debt and the extension are due on May 18.

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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