Published on 7/1/2014 in the Prospect News High Yield Daily.
New Issue: HUB sells $380 million 8 1/8% contingent cash pay notes at 99.75
By Paul A. Harris
Portland, Ore., July 1 – HUB Holdings, LLC and HUB Holdings Finance, Inc. priced $380 million of five-year senior contingent cash pay notes (Caa2/CCC+/) at 99.75 to yield 8.186% on Tuesday, according to a syndicate source.
The notes pay a cash coupon of 8 1/8%, which increases to 8 7/8% for PIK payments.
The reoffer price came rich to the 99.5 price talk. The yield printed tight to yield talk of approximately 8¼%.
Morgan Stanley & Co. LLC, BofA Merrill Lynch, RBC Capital Markets, BMO Capital Markets and Macquarie Capital were the joint bookrunners.
The Chicago-based insurance company plans to use the proceeds to fund a cash distribution to equity holders.
| Issuer: | HUB Holdings, LLC and HUB Holdings Finance, Inc.
|
| Face amount: | $380 million
|
| Proceeds: | $379 million
|
| Maturity: | July 15, 2019
|
| Securities: | Senior contingent cash pay notes
|
| Bookrunners: | Morgan Stanley & Co. LLC, BofA Merrill Lynch, RBC Capital Markets, BMO Capital Markets, Macquarie Capital
|
| Cash coupon: | 8 1/8%
|
| PIK coupon: | 8 7/8%
|
| Price: | 99.75
|
| Cash yield to worst: | 8.186%
|
| Spread: | 653 bps
|
| First call: | July 15, 2015 at 102
|
| Equity clawback: | 100% at 102 until July 15, 2015
|
| Trade date: | July 1
|
| Settlement date: | July 8
|
| Ratings: | Moody's: Caa2
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A and Regulation S for life
|
| Price talk: | 99.5 to yield approximately 8¼%
|
| Marketing: | Quick to market
|
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