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According to Market Intelligence, April 2023

S&P downgrades Advisor Group Holdings over Ladenburg Thalmann deal

S&P Global Ratings downgraded its issuer credit rating on Advisor Group Holdings Inc. to B from B+ over its pending acquisition of Ladenburg Thalmann Financial Services Inc.

The rating agency also removed the rating from CreditWatch negative. The outlook is stable.

Ratings noted how Advisor Group intends to finance its acquisition of Ladenburg Thalmann primarily through debt, with plans to roll out Ladenburg's outstanding $324 million senior unsecured notes and issue $775 million in new first-lien notes.

The new first-lien notes were assigned a B rating, while the existing first-lien debt was downgraded to B from B+. Advisor Group's senior unsecured notes were also downgraded to CCC+ from B-.

The stable outlook reflects the agency's view that the acquisition will close in the first half of 2020, and that Advisor Group will experience weak profitability and debt service coverage through at least 2020 as it integrates the acquisition.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.