Published on 2/29/2024 in the Prospect News Investment Grade Daily.
New Issue: Aon North America prices $6 billion senior notes in five parts
By Marisa Wong and Cristal Cody
Los Angeles, Feb. 29 – Aon North America, Inc. priced a five-part offering of senior notes (expected: Baa2/A-/BBB+) totaling $6 billion on Wednesday, according to an FWP filing with the Securities and Exchange Commission and details from a market source.
The notes are guaranteed by Aon plc, Aon Corp., Aon Global Holdings plc and Aon Global Ltd.
Aon priced $600 million of 5.125% notes due 2027 at 99.805 to yield 5.196%, or with a spread over Treasuries of 75 basis points; $1 billion of 5.15% notes due 2029 at 99.861 to yield 5.182%, or Treasuries plus 90 bps; $650 million of 5.3% notes due 2031 at 99.74 to yield 5.345%, or Treasuries plus 105 bps; $1.75 billion of 5.45% notes due 2034 at 99.848 to yield 5.47%, or Treasuries plus 120 bps; and $2 billion of 5.75% notes due 2054 at 99.392 to yield 5.793%, Treasuries plus 140 bps.
Price talk for the 2027, 2029, 2031, 2034 and 2054 notes was in the Treasuries plus 100 bps area, 115 bps area, 125 bps area, 140 bps area and 165 bps area, respectively.
Each of the notes will have make-whole call protection and then will be callable at par. In addition, all but the 2054 notes are subject to a special mandatory redemption provision.
The pricing followed fixed income investor calls that were held Tuesday.
Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Barclays, BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, ING Financial Markets LLC, UBS Securities LLC, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC are the joint bookrunners.
Proceeds will be used to fund the cash consideration for the acquisition of NFP, including debt repayment.
The outside date for the acquisition is Dec. 19, 2024. If the acquisition is not completed by the outside date or is terminated, there will be a special mandatory redemption at 101.
The issuer is based in Chicago. The guarantors have executive offices in Dublin, Chicago and London. Aon is a provider of risk management, insurance and reinsurance brokerage and also human resources solutions and outsourcing services.
| Issuer: | Aon North America, Inc.
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| Guarantors: | Aon plc, Aon Corp., Aon Global Holdings plc and Aon Global Ltd.
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| Amount: | $6 billion
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| Issue: | Senior notes
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| Bookrunners: | Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Barclays, BMO Capital Markets Corp., BNY Mellon Capital Markets, LLC, ING Financial Markets LLC, UBS Securities LLC, U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC
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| Senior co-managers: | Deutsche Bank Securities Inc. and BofA Securities, Inc.
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| Co-managers: | Loop Capital Markets LLC, Aon Securities LLC, ANZ Securities, Inc., Goldman Sachs & Co. LLC, nabSecurities, LLC, PNC Capital Markets LLC, Scotia Capital (USA) Inc., Standard Chartered Bank, UniCredit Capital Markets LLC, R. Seelaus & Co., LLC and Siebert Williams Shank & Co., LLC
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| Trustee: | Bank of New York Mellon Trust Co., NA
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| Counsel to issuer: | Cravath, Swaine & Moore LLP, Matheson LLP and Freshfields Bruckhaus Deringer LLP
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| Counsel to underwriters: | Davis Polk & Wardwell LLP
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| Mandatory redemption: | In some cases, in whole at 101, applicable only to 2027, 2029, 2031 and 2034 notes
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| Trade date: | Feb. 28
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| Settlement date: | March 1
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| Expected ratings: | Moody’s: Baa2
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| S&P: A-
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| Fitch: BBB+
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| Distribution: | SEC registered
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| 2027 notes
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| Amount: | $600 million
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| Maturity: | March 1, 2027
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| Coupon: | 5.125%
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| Price: | 99.805
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| Yield: | 5.196%
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| Spread: | Treasuries plus 75 bps
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| Call options: | Make-whole call at Treasuries plus 15 bps until Feb. 1, 2027; par call after that
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| Price talk: | Treasuries plus 100 bps area
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| Cusip: | 03740MAA8
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| 2029 notes
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| Amount: | $1 billion
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| Maturity: | March 1, 2029
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| Coupon: | 5.15%
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| Price: | 99.861
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| Yield: | 5.182%
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| Spread: | Treasuries plus 90 bps
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| Call options: | Make-whole call at Treasuries plus 15 bps prior to Feb. 1, 2029; par call after that
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| Price talk: | Treasuries plus 115 bps area
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| Cusip: | 03740MAB6
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| 2031 notes
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| Amount: | $650 million
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| Maturity: | March 1, 2031
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| Coupon: | 5.3%
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| Price: | 99.74
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| Yield: | 5.345%
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| Spread: | Treasuries plus 105 bps
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| Call options: | Make-whole call at Treasuries plus 20 bps prior to Jan. 1, 2031; par call after that
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| Price talk: | Treasuries plus 125 bps area
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| Cusip: | 03740MAC4
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| 2034 notes
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| Amount: | $1.75 billion
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| Maturity: | March 1, 2034
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| Coupon: | 5.45%
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| Price: | 99.848
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| Yield: | 5.47%
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| Spread: | Treasuries plus 120 bps
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| Call options: | Make-whole call at Treasuries plus 20 bps prior to Dec. 1, 2033; par call after that
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| Price talk: | Treasuries plus 140 bps area
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| Cusip: | 03740MAD2
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| 2054 notes
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| Amount: | $2 billion
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| Maturity: | March 1, 2054
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| Coupon: | 5.75%
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| Price: | 99.392
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| Yield: | 5.793%
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| Spread: | Treasuries plus 140 bps
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| Call options: | Make-whole call at Treasuries plus 25 bps prior to Sept. 1, 2053; par call after that
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| Price talk: | Treasuries plus 165 bps area
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| Cusip: | 03740MAF7
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