By Paul A. Harris
Portland, Ore., Jan. 19 – HUB International Ltd. priced $3 billion of high-yield notes in secured and unsecured tranches on Friday, according to market sources.
The deal included a $1.1 billion add-on to the HUB International 7¼% senior secured notes due June 15, 2030 (B2/B), which priced at 102, resulting in a 6.713% yield to worst.
The price came in the middle of price talk in the 102 area.
The deal also included a $1.9 billion tranche of new eight-year senior notes (Caa2/B-) that priced at par to yield 7 3/8%. The yield came at the tight end of yield talk in the 7½% area.
The secured add-on was heard to be playing to $1.5 billion of demand at mid-morning on Friday, at which time books for the new unsecured notes were around $3 billion, a market source said.
The add-on, which priced at 102, broke to 102.5 bid, 103 offered, while the unsecured tranche broke to par 1/8 bid, par ½ offered after having priced at par, a trader said.
The Chicago-based insurance brokerage and financial services provider plans to use the proceeds plus a repricing of its 2023 term loan facility to refinance its 2022 incremental term loan facility, as well as to repay loans under its revolver, to redeem its senior notes due 2026, to repurchase outstanding equity, and for general corporate purposes, including acquisitions under letters of intent.
| Issuer: | HUB International Ltd.
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| Amount: | $3 billion
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| Trade date: | Jan. 19
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| Settlement date: | Jan. 26
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| Joint bookrunners: | Morgan Stanley & Co. LLC, Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Barclays, BofA Securities Inc., RBC Capital Markets LLC, BMO Capital Markets Corp., Nomura Securities International Inc., Macquarie Capital (USA) Inc., UBS Securities LLC and Truist Securities, Inc.
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| Distribution: | Rule 144A and Regulation S for life
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| Marketing: | Roadshow
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|
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| Secured notes
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| Amount: | $1.1 billion
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| Issue: | Add-on to senior secured notes
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| Maturity: | June 15, 2030
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| Coupon: | 7¼%
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| Price: | 102
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| Yield to worst: | 6.713%
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| Spread: | 262 bps
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| First call: | June 15, 2026 at 103.625
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| Ratings: | Moody’s: B2
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| S&P: B
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| Price talk: | 102 area
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| Original issue: | $2.175 billion priced in June 2023
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| Fungibility: | Rule 144A add-on notes to immediately become fungible with original notes; Regulation S add-on notes to become fungible with original notes following 40-day cooling period
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| Unsecured notes
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| Amount: | $1.9 billion
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| Issue: | Senior notes
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| Maturity: | Jan. 31, 2032
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| Coupon: | 7 3/8%
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| Price: | Par
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| Yield: | 7 3/8%
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| Spread: | 324 bps
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| First call: | Jan. 31, 2027 at 103.688
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| Ratings: | Moody’s: Caa2
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| S&P: B-
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| Price talk: | 7½% area
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