HUB International Ltd., the insurance broker acquired by Apax Partners LLP and Morgan Stanley’s private-equity arm, set the price at which it will sell a $50 million add-on term loan, according to a person with knowledge of the transaction.
The loan, due in June 2017, will be sold at 99 cents to 99.5 cents on the dollar, said the person, who asked not to be identified because the terms are private. The so-called original-issue discount reduces proceeds for the borrower and increases the yield for investors.
The debt pays interest at 4.5 percentage points more than the London interbank offered rate with no minimum on the benchmark, said the person.
Lenders are being offered soft-call protection of 101 cents until April 24, 2013, meaning the company would have to pay 1 cent more than face value to refinance the debt before that date, according to the person.
Proceeds will be used for general corporate purposes including future acquisitions, the person said.
Morgan Stanley is arranging the financing for the Chicago- based company and investors must let the bank know by 2:30 p.m. today in New York whether they will participate in the deal, according to the person.
Apax and Morgan Stanley Principal Investments acquired HUB International for about $1.6 billion in June 2007, according to data compiled by Bloomberg.
Cara Siegel, a spokeswoman for HUB International, didn’t immediately respond to an e-mail seeking comment.
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