Focus Financial Partners Closes Credit Refinancing, Raising New Term Loan and Extending Maturities and Increasing Financial Flexibility

Rhea-AI Summary

Focus Financial Partners (NASDAQ:FOCS) successfully closed a credit refinance and raised $2 billion through new term loans. The $1.76 billion Term Loan B will refinance existing debt, maturing in June 2028, with an interest rate of SOFR + 325 bps. The $240 million Term Loan A matures in November 2027 with an interest rate of SOFR + 250 bps. Additionally, the $650 million Revolver was extended to November 2027. This refinancing strategy aims to enhance financial flexibility and fund future acquisitions while maintaining a targeted Net Leverage Ratio of 3.5x to 4.5x.

Positive

• Successfully raised $2 billion through new term loans.
• Refinanced existing debt to extend maturities and lower interest costs.
• Enhanced financial flexibility for future acquisitions.

Negative

• None.

NEW YORK, NY / ACCESSWIRE / November 28, 2022 / Focus Financial Partners Inc. (NASDAQ:FOCS) ("Focus"), a leading partnership of independent, fiduciary wealth management firms, announced today that it has closed on its credit refinance and term loan raise. Focus raised a new $1,760 million First Lien Term Loan B ("Term Loan B") and a new $240 million First Lien Term Loan A ("Term Loan A"), which is available on a 9 month delayed draw basis.

The Term Loan B will be used to refinance the existing $1,598.4 million First Lien Term Loan - Tranche A due in July 2024. The Term Loan B matures in June 2028 and has an annual interest rate of SOFR + 325 basis points, with SOFR subject to a 50 basis point floor. The Term Loan B priced at 98.25.

The Term Loan A matures in November 2027 and has an annual interest rate of SOFR + 250 basis points, with SOFR subject to a 50 basis point floor. The Term Loan A priced at 98.50.

The interest rate applicable to Focus' existing $790.4 million first lien term loan - Tranche B due in June 2028 (the "Term Loan Tranche B") has converted from LIBOR to SOFR. Otherwise, there were no changes to the terms of the Term Loan Tranche B.

Focus also amended its $650 million First Lien Revolver ("Revolver") to extend the maturity date to November 2027. The Revolver has an annual interest rate of SOFR + 225 basis points, with step downs based on Focus' Net Leverage Ratio.

Incremental Term Loan B and Term Loan A borrowings will be used to repay outstanding Revolver balances, fund future acquisitions, and for general corporate purposes including payment of expenses associated with these transactions.

For further information, please refer to the Credit Update dated November 28, 2022.

"Our strong credit profile enabled us to amend and extend our maturities as well as raise new term loan proceeds, furthering our financial flexibility," said Jim Shanahan, Chief Financial Officer of Focus. "The structure of our business model drives consistent, strong growth in our cash flows and we remain disciplined capital allocators, allowing us to take advantage of the M&A opportunity ahead while maintaining our targeted Net Leverage Ratio of 3.5x to 4.5x."

About Focus Financial Partners Inc.

Focus Financial Partners Inc. is a leading partnership of independent, fiduciary wealth management firms. Focus provides access to best practices, resources, and continuity planning for its partner firms who serve individuals, families, employers and institutions with comprehensive wealth management services. Focus partner firms maintain their operational independence, while they benefit from the synergies, scale, economics and best practices offered by Focus to achieve their business objectives. For more information about Focus, please visit www.focusfinancialpartners.com.

Cautionary Note Concerning Forward-Looking Statements

This release contains certain forward-looking statements that reflect Focus' current views with respect to certain current and future events. These forward-looking statements are, and will be, subject to many risks, uncertainties and factors relating to Focus' operations and business environment which may cause future events to be materially different from these forward-looking statements or anything implied therein. Any forward-looking statements in this release are based upon information available to Focus on the date of this release. Focus does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any statements expressed or implied therein will not be realized. Additional information on risk factors that could affect Focus may be found in Focus' filings with the Securities and Exchange Commission.

Investor and Media Contacts

Tina Madon
Senior Vice President
Head of Investor Relations & Corporate Communications
Focus Financial Partners
P: +1-646-813-2909
tmadon@focuspartners.com

Charlie Arestia
Vice President
Investor Relations & Corporate Communications
Focus Financial Partners
P: +1-646-560-3999
carestia@focuspartners.com

SOURCE: Focus Financial Partners

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FAQ

What are the details of the new term loans raised by Focus Financial Partners?

Focus Financial raised $1.76 billion in Term Loan B and $240 million in Term Loan A, with maturities in June 2028 and November 2027 respectively.

What interest rates apply to Focus Financial Partners' new loans?

Term Loan B has an interest rate of SOFR + 325 bps, and Term Loan A has an interest rate of SOFR + 250 bps.

How will Focus Financial Partners use the funds from the new loans?

The funds will be used to repay outstanding Revolver balances, fund future acquisitions, and cover associated transaction expenses.

What is the targeted Net Leverage Ratio for Focus Financial Partners?

Focus aims to maintain a targeted Net Leverage Ratio of 3.5x to 4.5x.

What was the purpose of amending the Revolver for Focus Financial Partners?

The amendment extended the maturity date of the $650 million Revolver to November 2027, enhancing financial flexibility.