HomeServe is in initial negotiations with lenders over a proposed $1.8 billion bond offering that would be secured against the company’s assets through a whole-business securitization, according to people familiar with the matter. Jefferies Financial Group Inc. is leading the deal, and proceeds would be used to refinance existing borrowings and to fund a $600 million dividend to owner Brookfield Asset Management Ltd.
Brookfield completed its acquisition of HomeServe in 2023. The financing under consideration is structured to include several tranches distributed across both public and private corners of the structured finance market, the sources said.
Among the contemplated pieces is a five-year tranche intended to be publicly tradeable. Early pricing discussions for that element are centered roughly between the upper end of 1 percentage point and the lower end of 2 percentage points over the benchmark Treasury rate, the people said.
In addition to the public five-year portion, HomeServe is considering two more privately placed tranches. One would carry a seven-year term with pricing being discussed in the mid-2 percentage point range over the benchmark Treasury, and the other would be a 10-year tranche with pricing in the upper-2 percentage point range over the benchmark.
Those involved cautioned that pricing conversations remain at an early stage and that the precise details could change. The size allocation for each tranche has not been finalized, according to the people. The transaction is currently expected to be completed in September.
This proposed issuance would be a whole-business securitization backed by HomeServe’s assets and led by Jefferies. The stated uses of proceeds are repayment of existing debt and the payment of a $600 million dividend to Brookfield Asset Management.
Context and mechanics
The financing plan calls for a mix of public and private structured-finance tranches, with the public five-year leg designed to be tradable. Private seven-year and 10-year tranches are also being discussed, each with different pricing targets relative to benchmark Treasury yields. Sources emphasized that these terms are preliminary.