HUB talks downsized $550 million eight-year notes at 5¾%-5 7/8%; pricing Thursday

By Paul A. Harris

Portland, Ore., Nov. 18 – HUB International Ltd. downsized its notes offering to $550 million from $1.2 billion, eliminating a proposed $650 million secured tranche of notes from the bond deal and shifting those proceeds to a concurrent term loan, according to market sources.

The remaining $550 million tranche of eight-year senior notes (Caa2/CCC+) is talked to yield 5¾% to 5 7/8%, snug to initial guidance in the high-5% area.

Commitments are due at noon ET on Thursday, and the Rule 144A and Regulation S for life deal is set to price thereafter.

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 become callable after three years at par plus 50% of the coupon. They feature a three-year 40% equity clawback at par plus the full coupon and a 101% poison put.

With the addition of the $650 million that was withdrawn from the bond deal, the term loan grew to $1.75 billion from $1.1 billion.

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

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