Hub International brings $1.2 billion notes in secured and unsecured tranches; pricing Thursday

By Paul A. Harris

Portland, Ore., Nov. 17 – Hub International Ltd. plans to price $1.2 billion of high-yield notes in two tranches on Thursday, according to market sources.

The Rule 144A and Regulation S for life deal features a $650 million tranche of seven-year senior secured notes (expected ratings B2/B) with initial guidance in the mid-4% area.

The offering also features a $550 million tranche of eight-year senior unsecured notes (expected ratings Caa2/CCC+) with initial guidance in the high-5% area.

The notes offering was scheduled to kick off on a Wednesday conference call with investors and is set to price on Thursday.

BofA Securities Inc., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Barclays, Goldman Sachs & Co. LLC, Credit Suisse Securities (USA) LLC, Macquarie Capital (USA) Inc., BMO Capital Markets Corp. and Nomura Securities International Inc. are the joint bookrunners.

The notes in both tranches become callable after three years at par plus 50% of the respective coupons. They feature three-year 40% equity clawbacks at par plus the full coupons and 101% poison puts.

The secured notes have a special call provision allowing the issuer to redeem 10% of those notes annually at 103 during the non-call period.

The Chicago-based insurance brokerage plans to use the proceeds to fund shareholder dividends and acquisitions.

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