LPL Financial sets discount on $800 million term loan B at 99½

By Sara Rosenberg

New York, March 22 - LPL Financial LLC firmed the original issue discount on its $800 million seven-year term loan B at 991/2, the tight end of the 99 to 99½ talk, according to a market source.

Pricing on the B loan is Libor plus 300 basis points with a 1% Libor floor, and a step-down was added to Libor plus 275 bps at net leverage of 1.75 times, the source said.

The term loan B includes 101 soft call protection for one year.

LPL's $1.6 billion credit facility (Ba2) also includes a $250 million five-year revolver that is expected to be undrawn at close and a $550 million five-year term loan A, with both of these tranches priced at Libor plus 250 bps, subject to a net leverage grid.

Bank of America Merrill Lynch and Goldman Sachs & Co. are the joint lead arrangers and bookrunners on the deal, with Morgan Stanley & Co. LLC and J.P. Morgan Securities LLC as additional bookrunners.

Proceeds will be used to replace an existing $163.5 million revolver and $1.33 billion of term loan borrowings as well as to pay related refinancing expenses.

Pricing on the company's existing revolver is Libor plus 350 bps. LPL's term loan borrowings have interest rates of Libor plus 175 bps on the term loan due 2013, Libor plus 275 bps with a 1.5% Libor floor on the term loan due 2015, and Libor plus 375 bps with a 1.5% Libor floor on the term loan due 2017, according to a recent 10-K filed with the Securities and Exchange Commission

With the refinancing, the company is seeking permission to declare a one-time special dividend for all common stockholders of up to $230 million using cash on hand and also a regular quarterly dividend of up to $0.48 per share annually.

Closing on the new credit facility is expected to occur in the second quarter.

LPL Financial is a broker-dealer, an RIA custodian and a consultant to retirement plans with offices in Boston, Charlotte, N.C., and San Diego.

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