Published on 5/14/2021 in the Prospect News Investment Grade Daily.
New Issue: Arthur J. Gallagher sells $1.5 billion fixed-rate senior notes in two parts
By Devika Patel
Knoxville, Tenn., May 14 – Arthur J. Gallagher & Co. priced $1.5 billion of senior notes in two tranches (Baa2/BBB/BBB) on Thursday, according to an FWP filed with the Securities and Exchange Commission.
There was $650 million of 2.5% 10-year notes at a spread of 90 basis points over Treasuries. These notes priced at 99.386 to yield 2.57%.
The deal also included $850 million of 3.5% 30-year notes at a spread Treasuries plus 115 bps. These notes priced at 98.808 to yield 3.565%.
BofA Securities Inc. and J.P. Morgan Securities LLC are the bookrunners for both tranches.
BMO Capital Markets Corp., Barclays and Citigroup Global Markets Inc. are additional bookrunners for the 2031 notes.
Proceeds will be used to acquire certain Willis Towers Watson plc reinsurance, specialty and retail brokerage operations or for general corporate purposes or other acquisitions if the transaction is not completed. If the transaction is terminated, the company may call the notes at 101 plus interest.
Rolling Meadows, Ill.-based Gallagher is an insurance brokerage and risk management services company.
| Issuer: | Arthur J. Gallagher & Co.
|
| Amount: | $1.5 billion
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| Description: | Senior notes
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| Trade date: | May 13
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| Settlement date: | May 20
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| Ratings: | Moody’s: Baa2
|
| S&P: BBB
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| Fitch: BBB
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| Distribution: | SEC registered
|
|
|
| 2031 notes
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| Amount: | $650 million
|
| Maturity: | May 20, 2031
|
| Bookrunners: | BofA Securities, Inc., J.P. Morgan Securities LLC, BMO Capital Markets Corp., Barclays and Citigroup Global Markets Inc.
|
| Co-managers: | ANZ Securities, Inc., Capital One Securities, Inc., HSBC Securities (USA) Inc., PNC Capital Markets LLC, CIBC World Markets Corp., U.S. Bancorp Investments, Inc., Lloyds Securities Inc., Citizens Capital Markets, Inc. and Comerica Securities, Inc.
|
| Coupon: | 2.5%
|
| Price: | 99.386
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| Yield: | 2.57%
|
| Spread: | Treasuries plus 90 bps
|
| Call: | Make-whole call at Treasuries plus 15 bps until Feb. 20, 2031, then a par call
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| Special redemption: | At 101 upon notice of WTW transaction termination event
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|
|
| 2051 notes
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| Amount: | $850 million
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| Maturity: | May 20, 2051
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| Bookrunners: | BofA Securities, Inc. and J.P. Morgan Securities LLC
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| Coupon: | 3.5%
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| Price: | 98.808
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| Yield: | 3.565%
|
| Spread: | Treasuries plus 115 bps
|
| Call: | Make-whole call at Treasuries plus 20 bps until Nov. 20, 2050, then a par call
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