Published on 10/27/2015 in the Prospect News Investment Grade Daily.
New Issue: ACE sells $5.3 billion notes in four tranches for Chubb acquisition
By Aleesia Forni
Virginia Beach, Oct. 27 – ACE INA Holdings Inc. priced a $5.3 billion four-part offering of senior notes (A3/A/A) on Tuesday in four tranches, according to a market source and an FWP filing with the Securities and Exchange Commission.
A $1.3 billion 2.3% tranche of five-year notes sold at 99.944 to yield 2.312%, or Treasuries plus 95 basis points.
There was also $1 billion of 2.875% seven-year notes sold at Treasuries plus 115 bps. Pricing was at 99.874 to yield 2.895%.
Also, $1.5 billion of 3.35% 12-year bonds priced at 99.693 to yield 3.385% with a spread of Treasuries plus 135 bps.
A $1.5 billion 4.35% tranche of 30-year bonds priced at 99.75 to yield 4.365%, or Treasuries plus 150 bps.
All four tranches sold tight of price talk.
Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are the bookrunners.
The notes are fully and unconditionally guaranteed by parent company Ace Ltd.
Proceeds from the deal will be used along with available by cash to fund the cash portion of the company’s $28 billion acquisition of Chubb Corp. that is expected to close in the first quarter of 2016.
Ace is a Zurich, Switzerland-based property and casualty insurance and reinsurance provider.
| Issuer: | ACE INA Holdings Inc.
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| Issue: | Senior notes
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| Amount: | $5.3 billion
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| Bookrunners: | Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, Citigroup Global Markets Inc.
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| Lead managers: | MUFG, Wells Fargo Securities LLC
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| Co-managers: | ANZ Securities, Inc., Barclays, BofA Merrill Lynch, Goldman, Sachs & Co., HSBC Securities (USA) Inc., ING Financial Markets LLC, Lloyds Securities Inc., RBS Securities Inc., BNY Mellon Capital Markets, LLC, Deutsche Bank Securities Inc., RBC Capital Markets, LLC, Standard Chartered Bank, BNP Paribas Securities Corp., Boenning & Scattergood, Inc., Credit Suisse Securities (USA) LLC, Drexel Hamilton, LLC, Lebenthal & Co., LLC, Macquarie Capital (USA) Inc., UBS Securities LLC, Williams Capital Group, LP
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| Trade date: | Oct. 27
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| Settlement date: | Nov. 3
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| Ratings: | Moody’s: A3
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| Standard & Poor’s: A
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| Fitch: A
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| Distribution: | SEC-registered
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| Five-year notes
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| Amount: | $1.3 billion
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| Maturity: | Nov. 3, 2020
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| Coupon: | 2.3%
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| Price: | 99.944
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| Yield: | 2.312%
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| Spread: | Treasuries plus 95 bps
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| Price guidance: | Treasuries plus 110 bps area
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| Make-whole call: | Treasuries plus 15 bps prior to Oct. 3, 2020, then callable at par
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| Seven-year notes
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| Amount: | $1 billion
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| Maturity: | Nov. 3, 2022
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| Coupon: | 2.875%
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| Price: | 99.874
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| Yield: | 2.895%
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| Spread: | Treasuries plus 115 bps
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| Price guidance: | Treasuries plus 130 bps area
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| Make-whole call: | Treasuries plus 20 bps prior to Sept. 3, 2022, then callable at par
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| 10.5-year notes
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| Amount: | $1.5 billion
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| Maturity: | May 3, 2026
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| Coupon: | 3.35%
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| Price: | 99.693
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| Yield: | 3.385%
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| Spread: | Treasuries plus 135 bps
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| Price guidance: | Treasuries plus 150 bps area
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| Make-whole call: | Treasuries plus 20 bps prior to Feb. 3, 2026, then callable at par
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| Thirty-year notes
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| Amount: | $1.5 billion
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| Maturity: | Nov. 3, 2045
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| Coupon: | 4.35%
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| Price: | 99.75
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| Yield: | 4.365%
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| Spread: | Treasuries plus 150 bps
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| Price guidance: | Treasuries plus 170 bps area
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| Make-whole call: | Treasuries plus 25 bps prior to May 3, 2045, then callable at par
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