Edelman Financial reworks first- and second-lien term loan sizes

By Sara Rosenberg

New York, June 26 – Edelman Financial Center LLC upsized its seven-year covenant-light first-lien term loan B to $1,455,000,000 from $1.41 billion and downsized its eight-year covenant-light second-lien term loan to $475 million from $495 million, according to a market source.

Also, pricing on the second-lien term loan was lowered to Libor plus 675 basis points from Libor plus 700 bps, and the original issue discount was tightened to 99.5 from 99, the source said.

The second-lien term loan still has a 0% Libor floor and hard call protection of 102 in year one and 101 in year two.

Pricing on the first-lien term loan remained at Libor plus 325 bps with a 25 bps step-down at 0.5 times inside closing first-lien secured leverage, a 0% Libor floor and an original issue discount of 99.5.

As before, the first-lien term loan has 101 soft call protection for six months.

The company’s now $2.08 billion of senior secured credit facilities, up from $2,055,000,000, also include a $150 million five-year revolver.

Morgan Stanley Senior Funding Inc., J.P. Morgan Securities LLC, Barclays, Deutsche Bank Securities Inc. and UBS Investment Bank are the joint lead arrangers and bookrunners on the deal, with Morgan Stanley the left lead on the first-lien term loan and JPMorgan the left lead on the second-lien term loan.

Recommitments were scheduled to be due at 11 a.m. ET on Tuesday, the source added.

Proceeds will be used to finance the acquisition of Financial Engines Inc. for $45 per share in cash. The transaction has a total value of about $3.02 billion.

Other funds for the transaction will come from equity, the amount of which was reduced with the $25 million in extra proceeds raised from the first-lien term loan upsizing.

Closing is expected in the third quarter, subject to approval by Financial Engines stockholders, regulatory approval and other customary conditions.

Edelman Financial, which is majority owned by Hellman & Friedman, is an independent financial planning firm. Financial Engines is a Sunnyvale, Calif.-based independent investment adviser.

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