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Cetera Financial shifts funds between first- and second-lien loans
By Sara Rosenberg
New York, Aug. 14 – Cetera Financial Group upsized its seven-year covenant-light first-lien term loan to $825 million from $775 million and downsized its eight-year covenant-light second-lien term loan to $190 million from $240 million, according to a market source.
Also, pricing on the first-lien term loan firmed at Libor plus 425 basis points, the low end of the Libor plus 425 bps to 450 bps talk, and pricing on the second-lien term loan finalized at Libor plus 825 bps, the low end of the Libor plus 825 bps to 850 bps talk, the source said.
In addition, the original issue discount on the first-lien term loan was revised to 99.75 from 99.5.
The debt has 50 bps MFN for life with no inside maturity carve-out.
Both term loans still have a 0% Libor floor, the first-lien term loan still has 101 soft call protection for six months, and the second-lien term loan still has an original issue discount of 99 and call protection of 102 in year one and 101 in year two.
The company’s $1,115,000,000 of credit facilities also include a $100 million five-year revolving credit facility.
UBS Investment Bank, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, SunTrust Robinson Humphrey Inc., Antares Capital and Jefferies LLC are the lead banks on the deal.
Allocations are targeted for Wednesday, the source added.
Proceeds will be used to help fund the buyout of the company by Genstar Capital.
Leverage through the second-lien debt will be about 5.5 times.
Closing is subject to regulatory approvals and other customary conditions.
Cetera is an El Segundo, Calif.-based network of financial advisers.
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