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LPL Financial Unit Reprices Senior Secured Credit Facility

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LPL Holdings, the wholly owned subsidiary of LPL Financial Holdings (LPLA - Free Report) , announced that it has successfully repriced its senior secured credit facilities under its existing credit agreement.  

Senior Secured Term Loan B’s spread has been reduced by 25 basis points (bps) from 250 bps over LIBOR to 225 bps over LIBOR. The spread on Revolving Credit Facility has also been reduced to a range of 125 bps to 175 bps over LIBOR from a spread of 150 bps to 200 bps over LIBOR, depending on secured net leverage ratio of LPL Holdings and its restricted subsidiaries.  The tenor on Senior Secured Term Loan B and Revolving Credit Facility were both increased by six months to seven years and five years, respectively.

The outstanding principal amount on the Senior Secured Term Loan B was also reduced by $200 million to $1,500 million with the help of proceeds from its $400 million add-on notes. The notes that were previously announced and completed on Sep 21, 2017, carry a yield-to-worst of 5.1%.

An arranger group of nine banks led by JPMorgan Chase repriced the senior secured credit facilities.

LPL Holdings will record an expense of $10 million with respect to debt issuance, which included original issue discount on Senior Secured Term Loan B. Out of this, approximately $1 million will be expended in the third quarter of 2017 and roughly $9 million will be capitalized and amortized over the life of the debt. Accelerated amortization expense relating to prior debt issuance costs worth $2 million is also expected to be expended next quarter.

Some stocks worth considering in the finance space are are Moelis & Company (MC - Free Report) , Stifel Financial Corporation (SF - Free Report) and Interactive Brokers Group, Inc. (IBKR - Free Report) . All three stocks have been witnessing upward revisions in earnings estimates.

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