| | Item 1.01 | Entry into a Material Definitive Agreement. |
Issuance of 6.750% Senior Notes due 2028
On November 17, 2023, LPL Holdings, Inc. (the “Company”), a wholly-owned subsidiary of LPL Financial Holdings Inc. (the “Guarantor”), completed the issuance and sale of $750 million aggregate principal amount of 6.750% Senior Notes due 2028 (the “Senior Notes”). The Senior Notes were issued pursuant to an Indenture, dated November 17, 2023, among the Company, the Guarantor and U.S. Bank Trust Company, National Association, as trustee (the “Base Indenture”), as supplemented by the First Supplemental Indenture, dated November 17, 2023 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”). The Indenture contains customary covenants and events of default.
The Senior Notes are senior unsecured obligations of the Company and are fully and unconditionally guaranteed on a senior unsecured basis by the Guarantor.
The sale of the Senior Notes has been registered with the Securities and Exchange Commission in the Company’s and the Guarantor’s shelf registration statement on Form S-3 (Registration Nos. 333-274631 and 333-274631-02).
The Company intends to use the net proceeds from the Senior Notes offering to repay outstanding borrowings under its revolving credit facility and for general corporate purposes.
The Senior Notes will mature on November 17, 2028, and will bear interest at the rate of 6.750% per year, with interest payable semi-annually on May 17 and November 17 of each year, commencing on May 17, 2024. The Company may redeem all or part of the Senior Notes at any time and from time to time prior to October 17, 2028 at a redemption price equal to the greater of: (1)(a) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the redemption date (assuming the Senior Notes matured on October 17, 2028) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined in the First Supplemental Indenture) plus 35 basis points less (b) interest accrued to, but excluding, the redemption date, and (2) 100% of the principal amount of the Senior Notes to be redeemed, plus, in either case, accrued and unpaid interest thereon to, but excluding, the redemption date. Thereafter, the Company may redeem the Senior Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Senior Notes being redeemed plus accrued and unpaid interest thereon to, but excluding, the redemption date.
The foregoing description of the Senior Notes and the Indenture is qualified in its entirety by reference to the Base Indenture, the First Supplemental Indenture, and the Form of 6.750% Senior Note due 2028, copies of which are filed as Exhibits 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K.
| | Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth above under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
