HUB to price $2.68 billion seven-year secured notes on Thursday; initial talk mid-7% area

By Paul A. Harris

Portland, Ore., June 7 – HUB International Ltd. plans to price a $2.675 billion offering of seven-year senior secured notes (B2/B) on Thursday, according to market sources.

The offering, which was scheduled to kick off on a Wednesday morning conference call with investors, is in the market with initial talk in the mid-7% area, according to a sellside source.

The deal had already garnered $2 billion of interest among investors by mid-morning on Wednesday, the source added.

The notes become callable after three years at par plus 50% of the coupon. A special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

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

Proceeds plus a concurrent $4.25 billion term loan and cash on hand will be used to refinance the 2018 term loan facility and the 2021 term loan facilities and repay outstanding loans under the revolving credit facilities, with the remainder to be used for general corporate purposes, including acquisitions (also acquisitions under letters of intent).

HUB International is a privately held insurance brokerage and financial services provider based in Chicago. Its sponsor is Hellman & Friedman.

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