Kestra upsizes to $425 million, finalizes spread at Libor plus 425 bps

By Paul A. Harris

Portland, Ore., April 26 – Kestra Financial Inc. upsized its oversubscribed seven-year term loan to $425 million from $410 million, and finalized talk at Libor plus 425 basis points with a 0% Libor floor and an original issue discount of 99, according to a market source.

The spread comes at the tight end of the 425 bps to 450 bps spread talk.

There are no step-downs.

In addition to the 101 soft call protection for six months, the deal features 50 bps of MFN protection for 12 months.

Books were scheduled to close Friday. The deal allocates on Monday.

The company’s upsized $500 million – from $485 million – of credit facilities (B3/B+) also include a $75 million five-year revolver.

UBS Investment Bank, Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Goldman Sachs Bank USA and SunTrust Robinson Humphrey Inc. are the leads on the deal.

Proceeds will be used to help fund the buyout of the company by Warburg Pincus LLC. Stone Point Capital LLC, Kestra Financial’s current majority owner, will maintain a minority stake in the company.

Closing is expected in the second quarter or early in the third quarter, subject to customary regulatory approvals.

The additional proceeds resulting from the $15 million upsizing of the term loan will be used to fund cash on the balance sheet.

Kestra Financial is an Austin, Texas-based provider of an advisor platform to financial professionals.

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