Moody's rates Hub loans B2, notes B3, Caa1

Moody's Investors Service said it assigned a B3 corporate family rating to Hub International Ltd., B2 ratings to its proposed $100 million senior secured revolving credit facility, $535 million senior secured term loan and $140 million senior secured delayed-draw term loan, a B3 rating to its proposed $395 million senior unsecured notes and a Caa1 rating to its proposed $395 million subordinated notes.

The outlook is stable.

The credit facilities and bonds will be issued in connection with the proposed acquisition of Hub by funds advised by Apax Partners together with Morgan Stanley Principal Investments in a transaction that values Hub at $1.9 billion. The proceeds of the proposed financing will be used to repay existing debt of about $160 million, to help fund the acquisition and to pay related fees and expenses.

The agency said the ratings reflect Hub's solid market position in North American insurance brokerage, its steady organic growth and its healthy profit margins.

These strengths are offset by the company's aggressive financial leverage and modest fixed charge coverage on a pro forma basis following the acquisition and by the general softening of rates in the property and casualty insurance market.

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