Cetera to sell $700 million secured notes due August 2030; initial talk high 9% to 10% area

By Paul A. Harris

Portland, Ore., Oct. 23 – Cetera Financial Group Inc. began a brief roadshow on Monday for a $700 million offering of Aretec Escrow Issuer 2 Inc. senior secured notes due August 2030 (B2/B), according to market sources.

Initial guidance has the notes coming to yield in the high-9% to 10% area, according to a bond trader, who said that the bond offering came into the market with $500 million of reverse inquiry.

The deal was set to kick off on a Monday conference call with investors, to be followed by a telephone roadshow on Monday and Tuesday.

The Rule 144A and Regulation S for life notes are set to price thereafter.

The notes become callable after three years at par plus 50% of the coupon. A special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

Goldman Sachs & Co. LLC is the left bookrunner. UBS Securities LLC, BMO Capital Markets Corp., Deutsche Bank Securities Inc., Truist Securities Inc., Jefferies LLC, Morgan Stanley & Co. LLC and Barclays are the joint bookrunners.

The San Diego-based financial services provider plans to use the proceeds plus a $1.69 billion incremental term loan to fund its acquisition of Avantax Inc.

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