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Victory Capital outlines plans for $1.5 billion credit facilities
By Sara Rosenberg
New York, Nov. 13 – Victory Capital Holdings Inc. has received a commitment for $1,495,000,000 of senior secured credit facilities, according to an 8-K recently filed with the Securities and Exchange Commission.
Barclays and RBC Capital Markets are the joint lead arrangers and bookrunners on the deal. Barclays is the administrative agent.
The facilities consist of a $100 million five-year revolver and a $1,395,000,000 seven-year covenant-light first-lien term loan.
Based on the commitment letter, pricing on the revolver and term loan is expected at Libor plus 350 basis points with a 0% Libor floor. The term loan will have one 25 bps step-down based on leverage and the revolver will have two 25 bps step-downs based on leverage.
The term loan is anticipated to have 101 soft call protection for six months.
Proceeds will be used to refinance existing credit facilities, and fund the previously announced acquisitions of USAA Asset Management Co. and Harvest Volatility Management LLC.
If the Harvest acquisition has been previously financed with an incremental term loan, the new term loan will refinance that incremental term loan.
In September, the company disclosed that it received a commitment from RBC and Barclays for an up to $265 million incremental senior secured term loan due Feb. 12, 2025 to help fund its acquisition of Harvest.
USAA Asset Management Co. is being acquired for $850 million plus the opportunity for additional contingent payments based on future business performance, and Harvest is being bought for $300 million.
Closing on the USAA transaction is expected in the second quarter of 2019, subject to regulatory and other customary approvals, conditions and consents. Closing on the Harvest acquisition is expected by the end of the first quarter of 2019.
Victory Capital is a Brooklyn, Ohio-based asset management firm. USAA Asset Management is a San Antonio-based investment firm.
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