Moody's rates Hub loan B2, notes Caa2

Moody's Investors Service said it assigned a B3 corporate family rating and B3-PD probability of default rating to Hub International Ltd., which is refinancing its debt to enhance liquidity, extend maturities and reduce its cost of capital.

The agency also said it assigned ratings to Hub's proposed new borrowings, including B2 ratings on its senior secured credit facilities and a Caa2 rating on its senior unsecured notes.

The proceeds from these borrowings, plus a small amount of cash on hand, will be used to repay all rated debt of Hub and of its indirect parent, Hub Holdings, LLC, Moody's said.

The outlook is stable.

The ratings reflect its solid market position in North American insurance brokerage, good diversification across products and geographic areas and consistently strong EBITDA margins, Moody's said.

Hub has generated good organic growth averaging in the low-single digits, the agency said, and has achieved strong EBITDA margins in the low 30s over the past few years.

These strengths are tempered by the company's high financial leverage and limited fixed charge coverage, Moody's added.

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