Marsh McLennan Announces Pricing of $7.25 Billion Senior Notes Offering

Rhea-AI Summary

Marsh McLennan (NYSE: MMC) has announced the pricing of a $7.25 billion Senior Notes offering across multiple tranches with varying maturities and interest rates. The company plans to use the proceeds to partially fund the pending acquisition of McGriff Insurance Services' parent company and for general corporate purposes. The Notes offering is expected to close on November 8, 2024. Most series of Notes include a special mandatory redemption provision at 101% of principal plus accrued interest if the McGriff transaction doesn't close by an agreed date.

Positive

• Successful pricing of large $7.25B senior notes offering indicates strong market confidence
• Strategic expansion through McGriff Insurance Services acquisition
• Diverse maturity profile of notes (2027-2055) helps manage debt structure

Negative

• Significant increase in debt burden with $7.25B new notes
• Potential mandatory redemption costs (101% of principal) if acquisition fails
• Higher interest expenses with rates ranging from 4.550% to 5.400%

Insights

Fixed Income Analyst

This $7.25 billion senior notes offering is a significant debt issuance structured to fund the McGriff Insurance Services acquisition. The multi-tranche offering features varied maturities (2027-2055) with competitive yields ranging from 4.55% to 5.40%, reflecting current market rates and MMC's credit quality.

The special mandatory redemption provision on most tranches (except 2055 notes) at 101% of principal provides investor protection if the acquisition fails. The extensive syndicate of 19 banks suggests strong institutional interest and broad distribution potential. The debt raise demonstrates MMC's ability to access capital markets efficiently, though it will increase leverage and interest expenses.

M&A Specialist

This debt financing marks a important step in MMC's strategic acquisition of McGriff Insurance Services. The substantial size of the offering indicates the significant scale of the pending transaction. The year-end closing target and regulatory approval requirements are standard for insurance industry M&A.

The flexible structure, with the 2055 Notes excluded from mandatory redemption, provides MMC operational flexibility. The deal should strengthen MMC's insurance brokerage capabilities and market position, though integration execution will be key. The timing aligns with industry consolidation trends as larger players seek scale advantages.

NEW YORK--(BUSINESS WIRE)-- Marsh McLennan (NYSE: MMC) (the “Company”) announced today that it has priced $950 million aggregate principal amount of its 4.550% Senior Notes due 2027, $1,000 million aggregate principal amount of its 4.650% Senior Notes due 2030, $1,000 million aggregate principal amount of its 4.850% Senior Notes due 2031, $2,000 million aggregate principal amount of its 5.000% Senior Notes due 2035, $500 million aggregate principal amount of its 5.350% Senior Notes due 2044, $1,500 million aggregate principal amount of its 5.400% Senior Notes due 2055 and $300 million aggregate principal amount of its Floating Rate Senior Notes due 2027 (collectively, the “Notes”). The Company intends to use the net proceeds from the Notes offering to fund, in part, the pending acquisition (the “Transaction”) of the parent company of McGriff Insurance Services, LLC, an affiliate of TIH Insurance Holdings, including the payment of related fees and expenses, as well as for general corporate purposes. The Transaction is targeted to close by year-end, subject to regulatory approval and other standard closing conditions. The closing of the Notes offering is not conditioned upon the closing of the Transaction and is expected to occur on November 8, 2024, subject to the satisfaction of certain customary closing conditions.

All series of Notes (other than the 5.400% Senior Notes due 2055 (the “2055 Notes”)) are subject to a special mandatory redemption, at a redemption price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest to, but excluding, the special mandatory redemption date, under certain circumstances if the Transaction is terminated or does not close by an agreed upon date. If the Transaction is not completed, the Company intends to use the net proceeds of the 2055 Notes for general corporate purposes.

Citigroup Global Markets Inc., BofA Securities, Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Barclays Capital Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc., TD Securities (USA) LLC and U.S. Bancorp Investments, Inc. are acting as joint book-running managers for the Notes offering. Academy Securities, Inc., ANZ Securities, Inc., BNP Paribas Securities Corp., BNY Mellon Capital Markets, LLC, CIBC World Markets, Corp., ING Financial Markets LLC, MUFG Securities Americas Inc., PNC Capital Markets LLC, Siebert Williams Shank & Co., LLC and Standard Chartered Bank are acting as co-managers for the Notes offering.

An effective shelf registration statement related to the Notes has previously been filed with the Securities and Exchange Commission (the “SEC”). The offering and sale of the Notes are being made by means of a prospectus supplement and an accompanying base prospectus related to the offering. Before you invest, you should read the prospectus supplement and the base prospectus for more complete information about the issuer and this offering.

You may obtain these documents for free by visiting the SEC website at www.sec.gov. Alternatively, copies may be obtained from any of the underwriters at (i) Citigroup Global Markets Inc., c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by telephone at 1-800-831-9146, (ii) BofA Securities, Inc., North Tryon Street, Charlotte, NC 28255 or Attn: Prospectus Department Email: dg.prospectus_requests@bofa.com or by telephone at 1-800-294-1322, (iii) Deutsche Bank Securities Inc., Attn.: Prospectus Group 1 Columbus Circle, New York, NY 10019 or Email: Prospectus.Ops@db.com or Tel: 1-800-503-4611, (iv) HSBC Securities (USA) Inc., Attn: Transaction Management Group, 66 Hudson Boulevard, New York, NY 10001 or email: tmg.americas@us.hsbc.com, (v) J.P. Morgan Securities LLC, 383 Madison Avenue, New York, NY 10179, Attn: Investment Grade Syndicate Desk or by calling collect at 1-212-834-4533 and (vi) Wells Fargo Securities, LLC, 608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402 Attn: WFS Customer Service, Telephone: 1-800-645-3751, Email: wfscustomerservice@wellsfargo.com.

This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor does it constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.

About Marsh McLennan

Marsh McLennan (NYSE: MMC) is a global leader in risk, strategy and people, advising clients in 130 countries across four businesses: Marsh, Guy Carpenter, Mercer and Oliver Wyman. With annual revenue of $23 billion and more than 85,000 colleagues, Marsh McLennan helps build the confidence to thrive through the power of perspective.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241030621892/en/

Media:

Erick Gustafson

Marsh McLennan

+1 202 263 7788

erick.gustafson@mmc.com

Investor:

Jay Gelb

Marsh McLennan

+1 212 345 1569

mmc.investor.relations@mmc.com

Source: Marsh McLennan

FAQ

What is the total value of Marsh McLennan's (MMC) senior notes offering in 2024?

Marsh McLennan's senior notes offering totals $7.25 billion across multiple tranches with different maturities and interest rates.

What will Marsh McLennan (MMC) use the proceeds from the notes offering for?

The proceeds will primarily fund the acquisition of McGriff Insurance Services' parent company and be used for general corporate purposes.

When is Marsh McLennan's (MMC) notes offering expected to close?

The notes offering is expected to close on November 8, 2024, subject to customary closing conditions.

What happens to Marsh McLennan's (MMC) notes if the McGriff acquisition fails?

Most note series include a special mandatory redemption at 101% of principal plus accrued interest if the acquisition fails or doesn't close by the agreed date.