Mercer Advisors Swaps Private Credit for $1.9B Syndicated Loan
Mercer Advisors has completed a $1.9 billion debt refinancing through a new seven-year term loan B, replacing its existing private credit financing and marking its first entry into the broadly syndicated loan market. The Denver-based RIA also added a $340 million revolving credit facility with a five-year maturity.
The oversubscribed deal lowers Mercer’s financing costs, extends its debt maturities and broadens its lender base to a wider group of institutional investors. The new loan priced with an interest rate of 2.75 percentage points over the floating-rate benchmark and at 99.75 cents on the dollar. Mercer’s previous debt carried a rate of 4.5 percentage points over the benchmark, and the refinancing cuts the company’s borrowing margin by 1.75 percentage points, saving about $29 million annually.
Existing lenders on the debt included KKR & Co., Ares Management Corp., BlackRock Inc. and funds managed by Apollo Global Management Inc., including a MidCap Financial fund, according to regulatory filings. The package also included a $250 million delayed draw term loan, which will go toward funding acquisitions and other investments.
The move reflects a broader trend. So far this year, more risky borrowers have been refinancing private debt in the syndicated markets than the other way around.
“This structure gives us meaningfully lower financing costs and a broader, more diversified investor base,” said Gün Keresteci, Mercer’s chief financial officer.
The refinancing follows strong growth for Mercer, which surpassed $110 billion in client assets, posted double-digit organic growth excluding market gains for two straight years and added a record number of M&A partners over the past 18 months.
Goldman Sachs Bank USA served as lead left arranger and administrative agent, with JPMorgan Chase Bank and BMO Capital Markets as syndication and documentation agents.
Mercer has $111 billion in client assets and is majority owned by Altas Partners, Oak Hill Capital, Genstar Capital and GIC.