By Paul A. Harris
Portland, Ore., June 8 – HUB International Ltd. priced a downsized $2.175 billion issue of seven-year senior secured notes (B2/B) at par to yield 7¼% on Thursday, according to market sources.
The issue size decreased from $2.675 billion, with $500 million shifted to a concurrent term loan.
The yield came at the tight end of yield talk in the 7 3/8% area. Initial talk was in the mid-7% area.
The new HUB 7¼% notes were wrapped around the issue price at Thursday’s close: 99 7/8 bid, par 1/8 offered, according to a bond trader.
Although it was widely known in the market that the company was keen to secure a rate of 7¼%, there was pushback, especially from one of the big, real-money accounts in the deal, the trader said.
Had there been a little bit more left on the table, that account might have added on to its already sizable order, the source added.
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 were the joint bookrunners.
Proceeds plus a concurrent upsized $4.75 billion term loan (from $4.25 billion) 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.
| Issuer: | HUB International Ltd.
|
| Amount: | $2.175 billion, decreased from $2.675 billion
|
| Issue: | Senior secured notes
|
| Maturity: | June 15, 2030
|
| Bookrunners: | 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
|
| Sponsor: | Hellman & Friedman
|
| Coupon: | 7¼%
|
| Price: | Par
|
| Yield: | 7¼%
|
| Spread: | 346 bps
|
| First call: | June 15, 2026 at 103.625
|
| Trade date: | June 8
|
| Settlement date: | June 20
|
| Ratings: | Moody’s: B2
|
| S&P: B
|
| Distribution: | Rule 144A for life and Regulation S
|
| Price talk: | 7 3/8% area
|
| Marketing: | Roadshow
|
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