S&P cuts Kestra Advisor

S&P said it downgraded its ratings on Kestra Advisor Services Holdings A Inc. and its first-lien term loan to B- from B.

The agency noted Kestra is issuing an incremental $145 million add-on to its $466 million first-lien term loan and a new $145 million second-lien term loan.

The company will use the loan proceeds to fund acquisitions of RIA/wealth management firms through its Bluespring business, add cash to the balance sheet, and potentially make a distribution to its shareholders.

“The transaction will weaken the company's pro forma credit metrics, resulting in gross debt-to-covenant EBITDA of 6.5x and covenant EBITDA to interest expense of 3.1x, compared with 4.4x and 5.3x, respectively, as of Sept. 30,” S&P said in a press release.

The outlook is stable.

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