By Paul Deckelman
New York, Nov. 3 – Acrisure LLC and Acrisure Finance, Inc. priced an upsized $925 million offering of senior notes due 2025 (Caa2/CCC+) at par to yield 7%, high-yield syndicate sources said Friday.
The deal was increased from the originally announced $725 million.
It priced at the tight end of talk envisioning a yield in the 7% to 7¼% area.
J.P. Morgan Securities LLC was bookrunner for the Rule 144A and Regulation S deal which was marketed via a roadshow that began on Monday.
The notes will come with three years of call protection.
Caledonia, Mich.-based insurance brokerage Arcrisure – the 14th largest brokerage based in the United States in terms of revenues in 2016, according to the company announcement – plans to use the proceeds to replace all of its existing second-lien notes, to pay related fees and expenses, and to fund acquisitions.
When it announced the upcoming bond deal, the company also said that in connection with the notes issue, it plans to reprice and increase the size of its existing first-lien term loan facility, “and make certain other modifications.”
On Oct. 26, it launched a $325 million add-on first-lien term loan and a repricing of its existing $1.846 billion first-lien loan, according to a market source, with J.P Morgan as the lead bank on that deal.
The add-on term loan was subsequently reduced in size to $125 million, with the $200 million difference shifted to the upsized bond deal, bringing the total size of the term loan down to $1.97 billion from $2.17 billion originally, a market source said Friday.
The market source also said that pricing on the term debt was Libor plus 425 basis points with a 1% Libor floor – reduced from earlier price talk of Libor plus 450 basis points to 475 bps with a 1% Libor floor, which itself was down from the interest rate on the existing loan of 500 bps over Libor, also with a 1% floor.
The source further said that the add-on term loan is talked with an original issue discount of 99.75.
-Sara Rosenberg contributed to this report.
| Issuers: | Acrisure LLC, Acrisure Finance, Inc.
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| Amount: | $925 million (upsized from $725 million)
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| Security: | Senior notes
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| Maturity: | Nov. 15, 2025
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| Bookrunner: | J.P. Morgan Securities LLC
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| Coupon: | 7%
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| Price: | Par
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| Yield: | 7%
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| Spread: | 473 bps
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| Call feature: | Make-whole call at 50 bps over Treasuries until Nov. 15, 2020, callable after that
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| Trade date: | Nov. 3
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| Settlement date: | Nov. 17
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| Ratings: | Moody’s: Caa2
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| S&P: CCC+
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| Distribution: | Rule 144A/Regulation S
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| Price Talk: | 7% to 7¼%
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| Marketing: | Roadshow
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