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Ardonagh launches $1.75 billion, €500 million notes; secured dollar portion lifted to $750 million
By Paul A. Harris
Portland, Ore., Feb. 9 – Ardonagh Group upsized its dollar-denominated tranche of the Ardonagh Finco Ltd. seven-year senior secured notes (B-/B-) to $750 million from $500 million on Friday, according to market sources.
The tranche size of the identically structured and rated euro-denominated secured notes remains unchanged at €500 million.
The dollar-denominated secured notes launched at 7¾%, at the tight end of the 7¾% to 8% price talk, and inside of initial guidance in the 8% area.
The euro-denominated secured notes launched at 6 7/8%, at the tight end of price talk in the 7% area (initial guidance was also in the 7% area).
Also unchanged is the Ardonagh Group Finance Ltd. $1 billion tranche of eight-year senior notes (CCC/CCC), which launched at 8 7/8%, at the tight end of price talk in the 9% area (initial guidance was also in the 9% area).
Demand for the Ardonagh dollar-denominated paper is around $3.5 billion across the secured and unsecured tranches, according to a trader, who remarked that while the books are big, they are not colossal.
Final terms and allocations are expected later Friday.
Joint bookrunner Morgan Stanley is the left lead on the dollar-denominated notes. Joint bookrunner Goldman Sachs International is the left lead on the euro-denominated notes. Barclays, BofA, Deutsche Bank, HSBC, Jefferies, JPMorgan, KKR, Lloyds, NatWest, Nomura and TD are also joint bookrunners.
The London-based insurance brokerage plans to use the proceeds from the Rule 144A for life and Regulation S notes, plus drawings under its term facilities, to redeem its existing notes, to repay drawn amounts under its outstanding senior secured credit facilities and for general corporate purposes, including one or more acquisition opportunities in the near term, as well as to fund cash to its balance sheet.
The $250 million of incremental proceeds resulting from the $250 million upsize to the secured notes will be used to refinance the term loan.
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