Ardonagh launches US$2 billion bond sale

Ardonagh launches US$2 billion bond sale | Insurance Business Australia

Insurance News

Report highlights banks’ triumph against private credit firms

Insurance News

By
Roxanne Libatique

The Ardonagh Group Ltd (Ardonagh) is poised to embark on a US$2 billion bond sale, signalling a triumph for banks against private credit firms proposing a record-breaking US$5 billion loan for the UK insurer.

According to Bloomberg, insiders familiar with the situation said a coalition of Wall Street lenders – led by Morgan Stanley and Goldman Sachs Group Inc – is positioned to oversee the bond offering.

The potential bond issuance may encompass a mix of secured and unsecured bonds denominated in US dollars and euros. Simultaneously, private credit firms are expected to extend a loan of approximately US$3 billion.

Ardonagh’s financial strategy

Ardonagh, with major shareholders including Madison Dearborn Partners and HPS Investment Partners, initially considered a private loan of up to US$5 billion. This contemplated financial strategy – aimed at refinancing debt, restructuring its balance sheet, and supporting acquisitions – would have set a record as the largest direct-lending deal, according to information from Bloomberg.

This imminent bond sale for Ardonagh reflects the prevailing trend of banks securing victories in the US$1.7 trillion private credit market.

The allure of high-yield bonds and broadly syndicated leveraged loans has intensified due to the potential for interest rate cuts, rendering these markets more attractive to borrowers.

Efforts to obtain comments on the matter outside regular business hours from representatives of Ardonagh and HPS have proven unsuccessful. Meanwhile, Madison Dearborn, Morgan Stanley, and Goldman Sachs have chosen not to provide comments on the unfolding development.