LPL Financial extends loan maturities, adds revolving commitments

By Marisa Wong

Madison, Wis., Oct. 7 – LPL Financial Holdings Inc. amended its credit agreement to extend the maturity of some of its tranche A term loans and revolving credit commitments, according to an 8-K filing with the Securities and Exchange Commission.

LPL entered into a second amendment, extension and incremental assumption agreement to its credit agreement dated March 29, 2012 on Oct. 1.

Bank of America, NA is the administrative agent, collateral agent, letter-of-credit issuer and swingline lender under the original credit agreement. JPMorgan Chase Bank, NA is the future administrative agent.

Under the amendment, among other things, lenders extended the maturity date of the tranche A term loans and the revolving credit commitments to Sept. 30, 2019 from March 29, 2017, subject, in each case, to a springing maturity 91 days inside of the existing tranche B term loan maturity date of March 29, 2019 if the tranche B term loans have not been refinanced, repaid or extended by Dec. 29, 2018.

All of the non-extended tranche A term loans were refinanced with incremental tranche A term loans.

Existing lenders and additional lenders also made new revolving credit commitments of $150 million to increase the aggregate amount of extended revolving credit commitments to $400 million.

In addition, all of the lenders party to the amendment consented to changes to the credit agreement, including increasing the “fixed” part of the general dividends basket in the agreement from $400 million $250 million, subject to the borrower receiving additional consents of lenders that, together with the consents under the amendment, constitute consent of the required lenders.

The extended revolving credit commitments are available for the working capital requirements and other general corporate purposes, including share repurchases.

The extended tranche A term loans require quarterly repayments equal to 7.5% per year, beginning with the quarter ending Dec. 31, 2017.

The amendment did not change the interest rates under the credit agreement. The extended tranche A term loans and the extended revolving commitments bear interest at Libor plus 175 basis points to 250 bps, depending on the borrower’s leverage ratio. The leverage ratio condition for each reduction in the interest rate applicable to the extended tranche A term loans and extended revolving commitments, however, was adjusted by 0.25 to 1.00 in the company’s favor under the amendment.

LPL is an investment company based in Boston.

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