UK insurer Hastings chose to go down the public route for its latest debt financing, placing £417 million of senior secured bonds on the Irish Stock Exchange.
The placement was split between £267 million of senior secured fixed rate notes at 8 percent, due in October 2020, and £150 million of senior secured floating rate notes due in October 2019 at LIBOR plus 600 bps.
Last week, Goldman Sachs' private equity arm acquired a 50 percent stake in Hastings – its first UK buyout since 2008 – in a deal which valued at £150 million. The bond issuance is intended in part to pay down existing debt.
Hastings, which specialises in car insurance, was the subject of keen interest from private equity earlier this year. Previously owned by Insurance Australia Group, which acquired the company in 2006, Hastings was the subject of a management buyout in 2009 led by entrepreneur Neil Utley.
Hastings chief executive Gary Hoffman said in a statement:“Hastings is a fast growing, successful general insurance business. We have a clear strategic plan to continue providing refreshingly straightforward insurance. We are proud of what we do but know we can get better – we intend to be a force for good in the industry.
“The strong appetite for the bond is a testament to the market’s confidence in the financial performance and stability of our business. With over £700m of institutional and shareholder capital behind us we can look forward to the future with huge confidence,” he added.
While there have been some significant private placements this year, public bond offerings continue to be a popular choice for established investment grade companies looking to raise capital.