S&P raises Advisor Group

S&P said it upgraded its issuer and senior secured debt ratings for Advisor Group Holdings Inc. to B from B- and raised its senior unsecured debt rating to CCC+ from CCC.

“The upgrade reflects Advisor Group's improved debt-to-EBITDA leverage, which we now expect to be about 5x-5.5x in 2023, down substantially from over 8x at the end of 2022. The improvement stems largely from higher cash sweep revenue, benefiting from the rapid increase in short-term interest rates since early 2022. In fact, the company's leverage declined to about 5x in the first quarter if we were to annualize the first quarter data,” S&P said in a press release.

S&P said it forecasts Advisor to generate annual cash sweep revenue of more than $350 million, about one-third of net revenue, substantially higher than the $32 million, just 4% of net revenue, in 2021.

The outlook is stable.

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