Bermuda-based insurer and reinsurer Aspen Insurance Holdings Limited is looking to raise approximately $238 million of capital through a bond issuance.
According to a recent securities filing, Highlands Holdings Bond Issuer, Ltd. and its subsidiary, Highlands Holdings Bond Co-Issuer, Inc., are proposing a $500 million issuance, just under half of which will be channelled to Aspen.
Both of these issuance firms are owned by funds affiliated with Apollo Global Management, Inc. and are also sister companies to Highlands Holdings Ltd., which is the direct parent company of Aspen.
Highlands expects to use around $237.5 million of the funds to finance a contribution to Aspen, with a further $237.5 million used to pay back holding company shareholders.
The remaining $25 million will be used to pay the costs, fees and expenses related to the offering.
The offering will consist of Senior Secured PIK Toggle Notes due 2025. This is a type of payment-in-kind bond in which the issuer has the option to defer an interest payment by agreeing to pay an increased coupon in the future. With toggle notes, all deferred payments must be settled by the bond’s maturity.