Raymond James enters $500 million five-year revolving credit agreement

By Marisa Wong

Morgantown, W.Va., Feb. 22 – Raymond James Financial, Inc. (RJF) and Raymond James & Associates, Inc. (RJA) entered into an unsecured $500 million revolving credit agreement on Feb. 19 with a syndicate of lenders led by Bank of America, Citibank, JPMorgan Chase Bank and Regions Bank, according to an 8-K filing with the Securities and Exchange Commission.

The credit agreement replaces RJF’s previous unsecured $300 million revolving credit agreement with a syndicate of lenders led by Bank of America and Regions Bank dated Aug. 6, 2015.

The new credit agreement matures on Feb. 19, 2024.

The companies may elect to increase the aggregate principal amount of commitments under the credit agreement to a maximum amount of $750 million with a $300 million sublimit on borrowings by RJF.

Borrowings will bear interest at Libor plus an applicable margin based on RJF’s debt ratings. The applicable margin for loans made to RJF ranges from 100 basis points to 172.5 bps, and based on current ratings the applicable margin would be 132.5 bps. The applicable margin for loans made to RJA ranges from 87.5 bps to 147.5 bps and would be 120 bps initially.

The company is also required to pay a facility fee of 12.5 bps to 27.5 bps. Based on current ratings, the facility fee would be 17.5 bps.

In addition, the credit agreement includes the following financial covenants for RJF: the ratio of consolidated funded debt of RJF and its subsidiaries to consolidated total capitalization of RJF and its subsidiaries is not to be greater than 0.35 to 1.00; consolidated tangible net worth of RJF and its subsidiaries is not to be less than the sum of $4,133,000,000 plus 50% of net cash proceeds from the issuance of equity interests plus 50% of consolidated net income of RJF and its subsidiaries, if positive; and RJF is not to permit RJA to allow its month-end net capital ratio of to be less than 10%.

The following financial covenants apply to RJA: the month-end net capital ratio of RJA is not to be less than 10%; and consolidated tangible net worth of RJA and its subsidiaries is not to be less than the sum of $1,687,000,000.

The investment banking company is based in St. Petersburg, Fla.

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