Howden leverages ‘market conditions’ to reprice £3.1bn debt

Insurance broker Howden has repriced £3.1bn ($4.1bn) of debt, in a move the firm said would save it approximately £6m ($8m) a year in interest payments.

Some 2.4bn ($3.1bn) of the debt was initially priced at 300 basis points (3%) above the secured overnight financing rate (SOFR) – a benchmark interest rate for dollar-denominated loans and derivatives – and has since been lowered by 25 basis points (0.25%).

The remaining £765m of revolving credit facility (RCF) was repriced concurrently by an undisclosed amount.

Howden said the repricing deal benefitted from “market conditions” and that it reflected a “continued confidence among credit investors in the group’s performance”.

Tight pricing level

Mark Craig, group chief financial officer at Howden, said: “I’m delighted that we’ve achieved one of the tightest pricing levels for leveraged loans by an insurance broker in this ratings category, as Howden continues to be well-supported by the capital markets.

“Being able to make our borrowing more efficient puts us in an even stronger position to continue delivering on our ambitious growth plans.”

He continued: “Howden’s leverage remains below many of our peers. Our market-leading organic growth, driven by our differentiated business model, is well above that of our listed peers and continues to make us an attractive proposition for our credit and equity investors.

“We continue to successfully implement this growth strategy globally. Last week, we announced our plans to bring our unique entrepreneurial model to the U.S. retail insurance broking market. So, it’s satisfying to see blue chip institutional lenders and banks support the refinancing of our debt at such historically attractive levels in the same week.”