By Paul A. Harris
Portland, Ore., Feb. 9 – Ardonagh Group upsized its three-part offering of high-yield bonds to about $2.3 billion equivalent from about $2.06 billion equivalent and priced the notes on Friday, according to market sources.
The deal included at upsized $750 million tranche of Ardonagh Finco Ltd. seven-year senior secured notes (B-/B) that priced at par to yield 7¾%. The tranche size increased from $500 million. The yield printed at the tight end of the 7¾% to 8% yield talk and inside of initial guidance in the 8% area.
The issue also included a €500 million tranche of Ardonagh Finco seven-year senior secured notes (B-/B) that priced at par to yield 6 7/8%. The yield printed at the tight end of yield talk in the 7% area. Initial guidance was also in the 7% area.
The sole unsecured tranche came from issuing entity Ardonagh Group Finance Ltd., which priced $1 billion of eight-year senior notes (CCC/CCC) at par to yield 8 7/8%. The yield printed at the tight end of yield talk in the 9% area. Initial guidance was also in the 9% area.
Demand for the Ardonagh dollar-denominated notes was around $3.5 billion across both the secured and unsecured tranches, according to a trader.
The London-based insurance brokerage plans to use the proceeds from the Rule 144A for life and Regulation S notes, plus drawings under its term facilities, to redeem its existing notes, to repay drawn amounts under its outstanding senior secured credit facilities and for general corporate purposes, including one or more acquisition opportunities in the near term, as well as to fund cash to its balance sheet.
The $250 million of incremental proceeds resulting from the $250 million upsize to the secured notes will be used to refinance the term loan.
| Company: | Ardonagh Group
|
| Bookrunners: | Morgan Stanley, Goldman Sachs International, Barclays, BofA, Deutsche Bank, HSBC, Jefferies, JPMorgan, KKR, Lloyds, NatWest, Nomura and TD
|
| Trade date: | Feb. 9
|
| Settlement date: | Feb. 16
|
| Distribution: | Rule 144A and Regulation S for life
|
|
|
| Dollar secured notes
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| Issuer: | Ardonagh Finco Ltd.
|
| Amount: | $750 million, increased from $500 million
|
| Issue: | Senior secured notes
|
| Maturity: | Feb. 15, 2031
|
| Left bookrunner: | Morgan Stanley
|
| Coupon: | 7¾%
|
| Price: | Par
|
| Yield: | 7¾%
|
| Spread: | 372 bps
|
| First call: | Feb. 15, 2027 at 103.875
|
| Ratings: | S&P: B-
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| Fitch: B
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| Price talk: | 7¾% to 8%
|
|
|
| Euro secured notes
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| Issuer: | Ardonagh Finco Ltd.
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| Amount: | €500 million
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| Issue: | Senior secured notes
|
| Maturity: | Feb. 15, 2031
|
| Left bookrunner: | Goldman Sachs
|
| Coupon: | 6 7/8%
|
| Price: | Par
|
| Yield: | 6 7/8%
|
| Spread: | 459 bps
|
| First call: | Feb. 15, 2027 at 103.438
|
| Ratings: | S&P: B-
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| Fitch: B
|
|
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| Senior notes
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| Issuer: | Ardonagh Group Finance Ltd.
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| Amount: | $1 billion
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| Issue: | Senior notes
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| Maturity: | Feb. 15, 2032
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| Left bookrunner: | Morgan Stanley
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| Coupon: | 8 7/8%
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| Price: | Par
|
| Yield: | 8 7/8%
|
| Spread: | 470 bps
|
| First call: | Feb. 15, 2027 at 104.438
|
| Ratings: | S&P: CCC
|
| Fitch: CCC
|
| Price talk: | 9% area
|
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