Ryan Specialty upsizes senior notes offering to $600 million

CHICAGO - Ryan Specialty Holdings, Inc. (NYSE: RYAN), a global specialty insurance organization, announced the pricing of $600 million in senior secured notes due in 2032 by its subsidiary, Ryan Specialty, LLC. The offering, which was upsized by $100 million from the initial announcement, was priced at par and is expected to close on September 19, 2024, subject to standard closing conditions.

The notes, carrying a 5.875% interest rate, will be backed by a senior secured guarantee from the company's existing and future wholly owned subsidiaries that also guarantee its credit agreement obligations. However, they will not be guaranteed by the parent company, Ryan Specialty Holdings, Inc. The collateral for the notes includes nearly all assets that secure the company's existing notes, as well as its senior secured term loan and revolving credit facility.

Proceeds from the sale are earmarked for the repayment of a portion of the borrowings under the revolving credit facility. These funds were previously utilized, in conjunction with cash on hand, to finance the acquisition of US Assure Insurance Services of Florida, Inc. The proceeds will also cover fees and expenses related to the offering.

The notes are available to qualified institutional buyers in accordance with Rule 144A, and to non-U.S. persons outside the United States as per Regulation S under the Securities Act of 1933. They have not been registered under the Securities Act or any state securities laws and may not be offered or sold within the United States without registration or an applicable exemption from such requirements.

Ryan Specialty, founded in 2010 and listed on the New York Stock Exchange, offers specialty products and solutions for insurance brokers, agents, and carriers, including distribution, underwriting, product development, administration, and risk management services.

This news is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The forward-looking statements in the release involve risks and uncertainties and should not be relied upon as predictions of future performance.

In other recent news, Ryan Specialty has been making significant strides in the insurance industry. The company reported an 18.8% increase in total revenue for Q2 2024, reaching $695 million. Additionally, Ryan Specialty has announced plans to raise $500 million through the offering of senior secured notes by its subsidiary, with the proceeds aimed at repaying part of the borrowings under the company's Revolving Credit Facility and covering related costs.

In a strategic move, Ryan Specialty has entered into definitive agreements to acquire the Property and Casualty managing general underwriters from Ethos Specialty Insurance, a subsidiary of Ascot Group Limited, and certain assets from Geo Underwriting Europe BV, a subsidiary of The Ardonagh Group. These acquisitions are expected to be finalized in the upcoming months, further enhancing the company's market position.

Barclays, a global financial services company, has initiated coverage on Ryan Specialty Group, assigning it an Overweight rating. This rating reflects the firm's positive outlook on Ryan Specialty Group, driven by factors such as the strong market for casualty pricing and a growing economic moat amid the ongoing consolidation within the wholesale brokerage sector.

Finally, Ryan Specialty announced a leadership succession, with Tim Turner stepping in as CEO, Jeremiah Bickham as President, and Janice Hamilton as CFO. The company has also formed strategic partnerships with MagMutual and Private Client Select. These recent developments underscore Ryan Specialty's commitment to strategic growth and financial performance.

InvestingPro Insights

As Ryan Specialty Holdings, Inc. (NYSE: RYAN) navigates its financial strategy with the pricing of senior secured notes, insights from InvestingPro shed light on the company's financial health and market performance. With a robust market capitalization of $16.79 billion, Ryan Specialty stands as a significant player in the insurance sector. The company's revenue growth has been notable, with a 19.87% increase in the last twelve months as of Q2 2024, which underscores its expanding business operations.

An InvestingPro Tip highlights that analysts have revised their earnings upwards for the upcoming period, reflecting optimism about the company's profitability prospects. This is further supported by the expectation of net income growth this year. Moreover, Ryan Specialty has delivered a strong return over the last five years, a testament to its enduring performance in the market.

However, potential investors should be aware of the company's valuation metrics. The P/E ratio stands at a high 96.08, and even with adjustments for the last twelve months as of Q2 2024, it remains elevated at 69.92. This suggests that the stock is trading at a premium, which could be a point of consideration for value-focused investors. Additionally, the company's Price / Book multiple is also high at 27.79, indicating a significant premium over the book value of its assets.

For those interested in delving deeper into Ryan Specialty's financials and market performance, there are additional InvestingPro Tips available, offering comprehensive analysis and forecasts that can guide investment decisions. The InvestingPro platform currently lists seven more tips for Ryan Specialty, which can be accessed by visiting the company's page at https://www.investing.com/pro/RYAN.

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