Moody’s revises Osaic outlook to stable

Moody's Investors Service said it concluded its review for downgrade of Osaic Holdings Inc. and revised the outlook to stable. The agency also confirmed Osaic's B2 corporate family rating, B1 senior secured first-lien bank credit facility rating, including the proposed $500 million incremental senior secured first-lien term loan, B1 senior secured rating and Caa1 senior unsecured rating.

Moody’s started the review on Dec. 18 after Osaic announced that it agreed to buy Lincoln Financial Advisors Corp. and Lincoln Financial Securities Corp. from Lincoln National Corp. On Jan. 31, Osaic announced it plans on funding the deal with a $500 million incremental senior secured first-lien term loan, balance sheet cash, and equity issuance.

“Moody's said the confirmation of Osaic's ratings reflects its improved profitability, cash flow and debt leverage throughout 2023, which will allow it to better absorb the debt it plans to issue to fund the purchase of Lincoln Wealth and maintain a financial profile consistent with its current rating level. The confirmation also reflects the relatively modest impact of the acquisition financing on Osaic's debt leverage and interest coverage as well as the scale and strategic benefits of the acquisition,” the agency said in a press release.

The agency said it forecasts Osaic’s Moody's-adjusted debt/EBITDA leverage ratio to be at or under 5.5x on a pro forma basis at the end of 2024, compared to Osaic's historical 5.3x ratio for the trailing 12 months ended Sept. 30.

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