S&P rates Hightower, loans B-

S&P said it assigned its B- issuer credit rating to Hightower Holdings LLC. The agency also assigned a B- issue rating to its first-lien $600 million seven-year term loan and a $150 million seven-year first-lien delayed draw term loan. The recovery ratings on the first-lien term loan and first-lien delayed-draw term loan is 4 (40%), indicating an average recovery in default. Hightower is also securing a $200 million five-year revolving credit facility.

“Hightower is a full-service wealth management firm characterized by a solid market position in the fragmented registered investment adviser space and a sticky adviser and client base, focused on high- and ultra-high-net-worth retail clients,” S&P said in a press release.

Hightower is expected the use the term loan and delayed-draw loan proceeds to repay debt.

The outlook is stable. “The outlook is stable, reflecting our expectation that Hightower will continue to operate with adjusted debt to EBITDA of over 5x and interest coverage of 1x-2x over the next 12 months while the company continues to grow both organically and through mergers and acquisitions,” the agency said.

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