By Paul A. Harris
Portland, Ore., Nov. 18 – HUB International Ltd. sold a downsized $550 million offering of eight-year senior notes (Caa2/CCC+) at par on Thursday to yield 5 5/8%, according to market sources.
The offering was downsized from $1.2 billion. The company eliminated a proposed $650 million secured tranche of notes from the bond deal and shifted those proceeds to a concurrent term loan.
The remaining $550 million tranche of eight-year senior notes was talked to yield 5¾% to 5 7/8%, snug to initial guidance in the high-5% area.
The notes that were left were oversubscribed at pricing.
BofA Securities Inc., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Barclays, Goldman Sachs & Co. LLC, Credit Suisse Securities (USA) LLC, Macquarie Capital (USA) Inc., BMO Capital Markets Corp. and Nomura Securities International Inc. are the joint bookrunners.
The notes become callable after three years at par plus 50% of the coupon. They feature a three-year 40% equity clawback at par plus the full coupon and a 101% poison put.
With the addition of the $650 million that was withdrawn from the bond deal, the term loan grew to $1.75 billion from $1.1 billion.
The Chicago-based insurance brokerage plans to use the proceeds to fund shareholder dividends and acquisitions.
| Issuer: | HUB International Ltd.
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| Amount: | $550 million
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| Issue: | Senior notes
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| Tenor: | Eight years
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| Bookrunners: | BofA Securities Inc., Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Barclays, Goldman Sachs & Co. LLC, Credit Suisse Securities (USA) LLC, Macquarie Capital (USA) Inc., BMO Capital Markets Corp. and Nomura Securities International Inc.
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| Coupon: | 5 5/8%
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| Price: | Par
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| Yield: | 5 5/8%
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| Call features: | Three years of call protection and then at par plus 50% of the coupon
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| Equity clawback: | Up to 40% at 105.625
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| Trade date: | Nov. 18
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| Ratings: | Moody’s: Caa2
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| S&P: CCC+
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| Price talk: | 5¾% to 5 7/8%; initial guidance in high-5% area
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