Moody's upgrades Advisor Group

Moody's Investors Service said it upgraded Advisor Group Holdings, Inc.'s corporate family rating to B2 from B3, its senior secured bank credit facility rating to B1 from B2, its senior secured rating to B1 from B2 and its senior unsecured rating to Caa1 from Caa2. Moody's also changed Advisor Group's outlook to stable from positive.

“The ratings upgrade reflects Advisor Group's strong scale and improving profitability and debt leverage. Moody's said Advisor Group is well positioned to continue to benefit from higher interest rates, with the Federal Reserve having raised in a series of increments its target federal funds rate to a range of 4.75%-5% from 0%-0.25% at the beginning of 2022,” the agency said in a statement.

Moody’s said it estimates Advisor Group’s leverage ratio will decline to around 5x at the end of 2023 unless it adds to its debt.

The stable outlook reflects the expectation that higher interest rates will support profitability and enable deleveraging over the next 12 to 18 months, Moody’s said.

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