By Andrea Heisinger
New York, Sept. 7 - Aon Corp. priced $1.5 billion of notes (Baa2/BBB+/BBB+) in three tranches on Tuesday, a source said late in the day.
Full terms were not available at press time.
A $600 million tranche of 3.5% five-year notes priced at a spread of 220 basis points over Treasuries. The notes priced at the tight end of guidance, which was initially in the 237.5 bps area and then was revised to a range of 220 bps to 225 bps.
The $600 million of 5% 10-year notes priced at a spread of Treasuries plus 245 bps. This tranche also priced at the tight end of talk whispered in the 262.5 bps area and then revised to a range of 245 bps to 250 bps.
The third tranche was $300 million of 6.25% 30-year bonds priced at a 265 bps over Treasuries spread. Price talk was initially in the 287.5 bps area and then put down to a range of 265 bps to 270 bps.
All three tranches have a change-of-control put of 101%.
Credit Suisse Securities, Morgan Stanley & Co. Inc., Bank of America Merrill Lynch, Deutsche Bank Securities Inc. and RBS Securities Inc. ran the books.
Co-managers were Aon Benfield Securities Inc., ANZ Securities, Northern Trust, RBC Capital Markets Corp., UBS Investment Bank and Wells Fargo Securities LLC.
Proceeds are being used in part to finance the merger with Hewitt Associates, Inc. If the merger doesn't occur on or prior to March 31, 2011, or is terminated, the company is required to redeem the notes at 101% of the amount. Proceeds may also be used to refinance existing Hewitt debt and subsidiaries and pay for certain merger-related fees.
The company has no recent outstanding bonds.
The risk management and consulting company is based in Chicago.
| Issuer: | Aon Corp.
|
| Issue: | Notes
|
| Amount: | $1.5 billion
|
| Bookrunners: | Credit Suisse Securities, Morgan Stanley & Co. Inc., Bank of America Merrill Lynch (active), Deutsche Bank Securities Inc., RBS Securities Inc. (passive)
|
| Co-managers: | Aon Benfield Securities Inc., ANZ Securities, Northern Trust, RBC Capital Markets Corp., UBS Investment Bank, Wells Fargo Securities LLC
|
| Change-of-control put: | 101%
|
| Trade date: | Sept. 7
|
| Ratings: | Moody's: Baa2
|
| Standard & Poor's: BBB+
|
| Fitch: BBB+
|
|
|
| Five-year notes
|
| Amount: | $600 million
|
| Maturity: | 2015
|
| Coupon: | 3.5%
|
| Spread: | Treasuries plus 220 bps
|
| Price talk: | 237.5 bps area (whispered), 220-225 bps (revised)
|
|
|
| 10-year notes
|
| Amount: | $600 million
|
| Maturity: | 2020
|
| Coupon: | 5%
|
| Spread: | Treasuries plus 245 bps
|
| Price talk: | 262.5 bps area (whispered), 245-250 bps (revised)
|
|
|
| 30-year bonds
|
| Amount: | $300 million
|
| Maturity: | 2040
|
| Coupon: | 6.25%
|
| Spread: | Treasuries plus 265 bps
|
| Price talk: | 287.5 bps area (whispered), 265-270 bps (revised)
|
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