HUB International sets talk in $3 billion two-part junk offering; pricing Friday

By Paul A. Harris

Portland, Ore., Jan. 18 – HUB International Ltd. set price talk in its $3 billion two-part offering of secured and unsecured high-yield notes, according to market sources.

The Rule 144A and Regulation S for life deal includes a $1.1 billion add-on to the HUB International 7¼% senior secured notes due June 15, 2030 (B2/B), talked in the 102 area, at the cheap end of initial price talk in the 102 to 102.5 area. The notes become subject to an initial call on June 15, 2026 at 103.625. The original $2.175 billion issue priced in June 2023.

The Rule 144A add-on notes will immediately become fungible with the original notes. The Regulation S add-on notes become fungible with the original notes following a 40-day cooling period.

The deal also includes a $1.9 billion tranche of new eight-year senior notes (Caa2/B-), which come with three years of call protection, talked to yield in the 7½% area, tight to the 7½% to 7¾% initial talk.

Books were scheduled to close on Thursday, and the deal is set to price on Friday, concurrently with the company’s $4.86 billion term loan B due June 2030.

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

The Chicago-based insurance brokerage and financial services provider plans to use the proceeds plus a repricing of its 2023 term loan facility to refinance its 2022 incremental term loan facility, as well as to repay loans under its revolver, to redeem its senior notes due 2026, to repurchase outstanding equity, and for general corporate purposes, including acquisitions under letters of intent.

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