By Paul A. Harris
St. Louis, April 26 - USI Holdings Corp. priced a downsized $400 million offering of high-yield notes on Thursday, according to an informed source.
The Briarcliff Manor, N.Y., insurance company priced a $225 million tranche of 7.5-year senior floating-rate notes (B3/CCC) at par to yield three-month Libor plus 387.5 basis points, 12.5 bps through the Libor plus 400 to 425 bps price talk.
In addition USI priced a downsized $175 million tranche of eight-year senior subordinated notes (Caa1/CCC) at par to yield 9¾%, 25 bps through the 10% to 10¼% price talk.
The subordinated notes tranche was downsized from $200 million.
The overall transaction was downsized to $400 million from $425 million, with $25 million of the financing shifted to the company's bank loan.
Goldman Sachs & Co. and JP Morgan were joint bookrunners for the Rule 144A for life and Regulation S notes.
Proceeds will be used to fund leveraged buyout of the company by GS Capital Partners for $17.00 in cash per share in a transaction valued at $1.4 billion, including repayment of about $365 million of USI debt.
| Issuer: | USI Holdings Corp.
|
| Amount: | $400 million (decreased from $425 million)
|
| Bookrunners: | Goldman Sachs & Co., JP Morgan
|
| Trade date: | April 26
|
| Settlement date: | May 4
|
| Distribution: | Rule 144A for life and Regulation S
|
|
|
| Senior floating-rate notes
|
| Amount: | $225 million
|
| Maturity: | Nov. 15, 2014
|
| Coupon: | Three-month Libor plus 387.5 bps
|
| Price: | Par
|
| Yield: | Three-month Libor plus 387.5 bps
|
| Call features: | Callable on Nov. 15, 2009 at 102, 101, par on and after Nov. 15, 2011
|
| Equity clawback: | Until Nov. 15, 2010 for 35% at par plus applicable coupon
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC
|
| Price talk: | Libor plus 400 to 425 bps
|
|
|
| Senior subordinated notes
|
| Amount: | $175 million (decreased from $200 million)
|
| Maturity: | May 15, 2015
|
| Coupon: | 9¾%
|
| Price: | Par
|
| Yield: | 9¾%
|
| Spread: | 509 bps
|
| Call features: | Callable on May 15, 2011 at 104.875, 102.438, par on and after May 15, 2013
|
| Equity clawback: | Until May 15, 2010 for 35% at 109.75
|
| Ratings: | Moody's: Caa1
|
| Standard & Poor's: CCC
|
| Price talk: | 10% to 10¼%
|
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