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Cetera launches $1.69 billion incremental term loan at 97-97.5 OID
By Sara Rosenberg
New York, Oct. 17 – Cetera Financial Group Inc. (Aretec Group Inc.) launched on Tuesday its fungible $1.689 billion incremental first-lien term loan due August 2030 with original issue discount talk of 97 to 97.5, according to a market source.
Pricing on the incremental term loan is SOFR+CSA plus 450 basis points with a 0% floor, in line with existing 2030 first-lien term loan pricing. CSA is 10 bps one-month rate, 15 bps three-month rate and 25 bps six-month rate.
The incremental term loan and the existing 2030 term loan are getting 101 soft call protection for six months.
Like the existing 2030 term loan, the incremental term loan has a springing maturity to the company’s existing senior notes.
The company is also getting a $300 million five-year revolving credit facility.
UBS Securities LLC, Goldman Sachs Bank USA, BMO Capital Markets Corp., Deutsche Bank Securities Inc., Truist Securities Inc., Jefferies LLC, Morgan Stanley Senior Funding Inc., Barclays and Antares Capital are the arrangers on the deal.
Commitments are due at noon ET on Oct. 26.
Proceeds will be used with $700 million of other secured debt to fund the acquisition of Avantax Inc. for $26.00 in cash per share in a transaction valued at about $1.2 billion, inclusive of Avantax’s net debt, and to refinance the company’s existing first-lien term loan due 2025.
In conjunction with the acquisition, Genstar and co-investors will be reinvesting in Cetera with new and rollover equity.
Closing is expected by the end of this year, subject to stockholder approval, regulatory approvals and other customary conditions.
Pro forma for the transaction, the first-lien term loan will total around $2.439 billion.
Cetera is a San Diego-based investment adviser network, providing wealth management services through a network of independently managed firms. Avantax is a Dallas-based provider of tax-focused financial planning and wealth management.
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