The credit backing a dividend recapitalization for HMSC Corp., the holding company of Swett & Crawford Group, broke for trading late last Wednesday. The term loan broke around par 1/4-1/2 and slipped slightly to the par 3/8-1/2 level, according to a trader who commented it was a slow day the deal broke. The $395 million credit is being used in part to fund a dividend, the size of which could not be determined. The company is owned in part by HM Capital and Banc of America Capital Investors.
Credit Suisse and Deutsche Bank lead the credit, which hit the market March 16. It comprises a five-year, $25 million revolver; a seven-year, $285 million term loan "B" and a seven-and-a-half-year, $110 million second-lien term loan. The revolver and "B" term loan are priced at LIBOR plus 2 1/4% and the second lien is priced at LIBOR plus 5 1/2%. Along with the dividend, the credit is being used to repay approximately $259 million of existing debt and for general corporate purposes.
In March Moody's Investors Service lowered the corporate family rating of HMSC to B2 from B1 in light of the added debt. Swett & Crawford, based in Atlanta, Ga., is the largest U.S. wholesale insurance broker based on revenues. Calls to a company spokesman were not returned.