Hub downsizes to $700 million, restructures note offering, ups talk

By Paul A. Harris

St. Louis, June 7 - Hub International Ltd. downsized its junk bond offering to $700 million from $790 million, shifting $90 million of its leveraged buyout financing to the bank loan market on Thursday, according to market sources.

Meanwhile the Chicago-based insurance broker abandoned a proposed tranche of 7.5-year senior floating-rate notes and increased price talk on the two remaining tranches it has in the market.

Hub is now talking a $305 million tranche of seven-year senior fixed-rate notes (B3/CCC+) at the 9% area, 25 basis points higher than the high end of the previous price talk, 8½% to 8¾%.

Hub also raised talk on its $395 million tranche of eight-year senior subordinated notes (Caa1/CCC+) to 10¼%, also 25 bps higher than the high end of the previous talk, 9¾% to 10%.

The deal is expected to price on Friday.

Morgan Stanley and Merrill Lynch & Co. are joint bookrunners for the Rule 144A for life notes.

Proceeds will be used to help fund the LBO of the company by Apax Partners and Morgan Stanley Principal Investments.

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