LPL Financial announces the completion of Leverage-Neutral


SAN DIEGO, March 15, 2021 (GLOBE NEWSWIRE) – LPL Financial Holdings Inc. (Nasdaq: LPLA) today announced that its wholly owned subsidiary, LPL Holdings, Inc. (“LPL Holdings”), has finalized the amendment previously announced of its Revolving Credit Facility (the “Credit Agreement Amendment”) and its Senior Unsecured Note Offering (the “Senior Notes”).

LPL Holdings used the net proceeds of the senior note offering, together with the cash available to the company, to redeem its existing $ 900 million of senior unsecured notes due 2025 (the “Notes”. 2025 ”) and to pay the fees and expenses related to the Senior Notes. the offer and the amendment to the credit agreement. The senior notes bear interest at a rate of 4,000% payable semi-annually in arrears on March 15 and September 15 of each year, commencing September 15.e, 2021. The Senior Notes were valued at 100% of the Total Principal Amount and will mature on March 15e, 2029. Following the amendment to the credit agreement, LPL Holdings increased the size of its revolving credit facility from $ 750 million to $ 1.0 billion and extended the maturity date of the facility revolving credit from 2024 to 2026.

The outstanding debt of LPL Holdings following the issuance of senior notes and the amendment of the credit agreement is summarized in the following table:


Exceptional Main Rising
(dollars in thousands)
Running In force
Margin

Yield TO
Emission

Maturity

Revolving credit facility (a) $ LIBOR + 125 bps (d) 03/15/2026
Senior secured term loan B (b) 1,059,300 LIBOR + 175 bps (d) 12/11/2026
Senior unsecured bonds 2027 (c) 400,000 4.625% Fixed 4.625 % 11/15/2027
Senior Unsecured 2029 Notes (c) 900,000 4.000% Fixed 4.000 % 03/15/2029
Total $ 2 359 300
(a) The revolving credit facility consists of a total committed principal amount of $ 1.0 billion and was unused at closing. The loans, if any, will bear interest at a variable rate which, in the case of LIBOR loans, will be LIBOR plus 125 to 175 basis points per annum, depending on the guaranteed net leverage ratio of LPL Holdings and its restricted subsidiaries.
(b) The Senior B Secured Term Loan was issued at 25 basis points of initial issue haircut and has no debt maintenance or interest coverage covenants.
(vs) The 2027 and 2029 Senior Unsecured Notes do not have covenants to maintain leverage or interest coverage.
(D) The LIBOR option is one, two, three or six month LIBOR, as selected by LPL Holdings, or, with the approval of the relevant lenders, twelve month LIBOR or another period acceptable to the LIBOR. administrative agent (including a shorter period). LIBOR is subject to a floor interest rate of 0%.

LPL Holdings incurred costs of approximately $ 38 million as a result of the senior note offering and the amendment of the credit agreement, of which approximately $ 12 million is expected to be capitalized and amortized over the term of the debt. . The Company expects approximately $ 25 million of costs to be expensed in the first quarter of 2021. Due to the Senior Note offering and the 2025 Note redemption, and including related costs , including the costs associated with the modification of the credit agreement, the Company (as defined below) estimates the annual interest cost savings to be approximately $ 13 million at current interest rates.

The amendment to the credit agreement was managed by a group of fourteen bank arrangers led by JPMorgan Chase Bank, NA

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Senior Bonds. The Senior Notes have not been and will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent a registration or an applicable exemption from the requirements of the Senior Notes. registration of the Securities Act of 1933. Senior Notes are offered only to persons reasonably suspected of being Qualified Institutional Purchasers under Rule 144A under the Securities Act of 1933 and outside the United States only to non-US investors in accordance with S.

Forward-looking statements
Statements in this press release regarding future amortization by LPL Holdings of debt issuance costs and interest expense savings, as well as any other statements that are not related to current facts or current conditions or which are not purely historical, constitute forward-looking statements. These forward-looking statements are based on the historical performance of the Company and its plans, estimates and expectations as of the date hereof. The words “expects”, “intention” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements do not guarantee that future results, plans, intentions or expectations expressed or implied will be achieved. Matters subject to forward-looking statements involve known and unknown risks and uncertainties, including economic, legislative, regulatory, competitive and other factors, which may cause actual results or the timing of events to be materially different. those expressed or implied by forward-looking statements. Important factors that could cause or contribute to such differences include: differences between the costs of issuing debt securities that we expect to incur and the costs that we actually incur, and potential changes in applicable accounting standards. The forward-looking statements contained in this press release should be evaluated together with the risks and uncertainties that affect the business of LPL Financial Holdings Inc. (together with its subsidiaries, the “Company”), including the risk factors set out in Section I, “Article 1A. Risk Factors ”in the Company’s 2020 Annual Report on Form 10-K, as may be amended or updated in the Company’s Quarterly Reports on Form 10-Q or other documents filed with of the Securities and Exchange Commission. Except as required by law, the Company specifically disclaims any obligation to update any forward-looking statements as a result of developments occurring after the date of this press release, even if its estimates change, and you should not rely on any statements contained herein as representing the views of the Company as of any date subsequent to the date of this press release.

About LPL Financière
LPL Financial (https://www.lpl.com) is a market leader in retail financial advice, the country’s largest independent broker / trader (+) and a leading custodian (or custodian) of AIR. We serve independent financial advisors and financial institutions, providing them with the technology, research, clearing and compliance services, and practice management programs they need to create and develop successful practices. LPL enables them to provide objective advice to millions of American families seeking wealth management, retirement planning, financial planning and asset management solutions.

+ Based on total revenues, Financial Planning magazine June 1996-2020.

Securities and advisory services offered by LPL Financial LLC, a registered investment advisor. FINRA / SIPC member.

Investor Relations – Chris Koegel, (617) 897-4574
Media Relations – Lauren Hoyt-Williams, (980) 321-1232


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