New deal cuts debt-to-EBITDA ratio to 4.2 times

Toby Esser, Cooper Gay

Broking group Cooper Gay Swett & Crawford (CGSC) has raised $500m (£327m) by issuing debt to US investors.

The new debt is held at group level, and replaces existing debt of $425m that was previously segregated between US unit Swett & Crawford and UK-based Cooper Gay Holdings.

The new financing extends the group’s debt maturity date to 2020 from 2014 and also provides a $75m credit facility for future investment.

The new financing cuts CGSC’s debt-to-EBITDA ratio to 4.2 times. In 2011, CGSC’s debt was 5.2 times, according to filings with Companies House. CGSC chief executive Toby Esser (pictured) at the time said he was keen to reduce the level.

CGSC said it could secure the new debt financing at ”attractive pricing” because of “strong investor demand”.

CGSC has a B2 credit rating from Moody’s and B from Standard & Poor’s.

The new debt financing closely follows the private equity investment CGSC secured from Lightyear Capital in January.

CGSC chief financial officer Phil Rock said: “In the first four months of 2013, we have completed a $190m equity transaction and have now finalised our $500m debt financing, which was well received by investors.

“The ‘covenant-lite’ nature of the new debt deal means that we retain great flexibility moving forward across our group, having removed the cross-border constraints of our previous terms by lifting the debt to the CGSC level.

“After the equity deal with Lightyear Capital and co-investors, we are carrying significant cash balances and we are in a comfortable net leverage position of about 4.2x ebitda, with the business producing strong free cashflows.”

Esser added: “With more than $100m surplus cash on our balance sheet, the $75m revolving facility we have secured here, as well as further debt and equity we have available, we have in excess of $300m of financial resources ready to invest in our business. We will do so carefully as we have always done, but we are entering an exciting phase of our development and I expect to see strong growth over the next few years.”

Morgan Stanley Senior Funding, JP Morgan, Royal Bank of Canada, Wells Fargo and National Australia Bank assisted the company with the execution of the credit facilities.