Moody's rates Hightower B3, loans B2

Moody's Investors Service said it assigned a B3 corporate family rating to Hightower Holdings, LLC and a B2 senior secured bank credit facility rating to its planned $600 million first-lien term loan, $150 million first-lien delayed draw term loan and $200 million first-lien revolver.

It also plans to issue a further $300 million in other unsecured debt, which will be subordinated to the first-lien facility.

Hightower intends to refinance its capital structure using the proceeds from its new term loan and other unsecured debt, together with cash on hand and new equity from its financial sponsor Thomas H. Lee Partners.

The B3 CFR reflects Hightower's high debt leverage, weak profitability but strong and growing franchise in the registered investment advisors sector, the agency said.

“The outlook is stable, reflecting Moody's expectation that the firm's strong growth trajectory, fueled by profit-generating M&A transactions and a favorable environment for asset gathering, helps offset Hightower's high debt leverage,” the agency said in a press release.

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