Howden upsizes, launches $1 billion secured and $500 million unsecured notes; pricing Friday

By Paul A. Harris

Portland, Ore., Feb. 2 – Howden Group (B2/B) upsized a two-part offering of high-yield notes to $1.5 billion from $1.25 billion and launched the deal on Friday morning, according to market sources.

The Rule 144A and Regulation S for life deal, which was scheduled to kick off on a Monday morning conference call with investors, features an upsized $1 billion tranche of Howden UK Refinance plc/Howden US Refinance LLC seven-year senior secured notes (B2/B) launched at 7¼%, tight to price talk in the 7 3/8% area (initial guidance was in the mid-7% area). The tranche size increased from $750 million.

The deal also features a $500 million tranche of Howden UK Refinance 2 plc/Howden US Refinance LLC eight-year senior notes (Caa1/CCC+) launched at 8 1/8%, 12.5 basis points inside of price talk in the 8 3/8% area (initial guidance was in the mid-8% area).

Pricing is set for later Friday.

The notes in both tranches come with three years of call protection.

Morgan Stanley, JPMorgan, BofA, Barclays, Goldman Sachs, RBC, Citigroup, HSBC, ING, Lloyds, NatWest, Santander and Howden Capital Tiger Markets & Advisory are the joint bookrunners.

The London-based insurance intermediary group plans to use the proceeds plus proceeds from concurrent dollar- and euro-denominated term loans to refinance a portion of its outstanding dollar-denominated term loan, to pay off its outstanding euro-denominated term loans, to pay off its second-lien facility and for general corporate purposes.

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