Published on 9/7/2012 in the Prospect News High Yield Daily.
New Issue: Hub International sells upsized $740 million six-year notes at par to yield 8 1/8%
By Paul A. Harris
Portland, Ore., Sept. 7 - HUB International Ltd. priced an upsized $740 million issue of six-year senior notes (Caa2/CCC+/) at par to yield 8 1/8% on Friday, according to a syndicate source.
The yield printed at the tight end of yield talk set in the 8¼% area.
The deal's first call premium was reduced to par plus 50% of the coupon from 75% of the coupon. The two-year length of call protection remained unchanged.
Morgan Stanley & Co. LLC, Bank of America Merrill Lynch and RBC Capital Markets LLC were the joint bookrunners for the issue, which was upsized by $10 million.
The Chicago-based insurance company plans to use the proceeds to repurchase its existing senior notes and subordinated notes and for general corporate purposes. Proceeds from the upsizing will be used for general corporate purposes.
Issuer: | HUB International Ltd.
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Amount: | $740 million, increased from $730 million
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Maturity: | Oct. 15, 2018
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Securities: | Senior notes
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Bookrunners: | Morgan Stanley & Co. LLC, Bank of America Merrill Lynch, RBC Capital Markets LLC
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Co-managers: | CIBC World Markets Corp., BMO Capital Markets Corp.
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Coupon: | 8 1/8%
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Price: | Par
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Yield: | 8 1/8%
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Spread: | 725 bps
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Call features: | Make-whole call at Treasuries plus 50 bps until to Oct. 15, 2014, then callable at 104.063, 102.031, par on and after Oct. 15, 2016
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Equity clawback: | 40% at 108.125 until Oct. 15, 2014
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Trade date: | Sept. 7
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Settlement date: | Sept. 18
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Ratings: | Moody's: Caa2
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| Standard & Poor's: CCC+
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Distribution: | Rule 144A for life
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Price talk: | 8¼% area
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Marketing: | Roadshow
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