Fitch Affirms Aon's Ratings; Outlook Stable

Business Wire,  June 16, 2008  

• E-mail
• Print
• Link

CHICAGO -- Fitch Ratings has affirmed Aon Corporation's (Aon) Issuer Default Rating (IDR) at 'BBB+', its related senior debt ratings, as well as the commercial paper rating at 'F2'. The Rating Outlook is Stable. (See all ratings listed below.)

Aon's ratings reflect Aon's progress in developing a new business model that is less reliant on contingent commission income, as well as the company's improved balance sheet and cash flow generation, very good financial flexibility and positive financial trends.

Additionally, Aon's ratings reflect the company's favorable competitive position amongst the top three global brokers, with major operations in insurance brokerage, reinsurance brokerage and human capital consulting. Aon continues to demonstrate its ability to retain clients and grow new business while improving profitability. Cash flow remains strong with earnings-based interest coverage of roughly 10 times (x) as of March 31, 2008.

Fitch believes that since Aon's settlement with the New York Attorney General in March 2005, the company has executed its stated strategic plans as projected. Aon hired a new CEO, announced a three-year restructuring plan projected to bring over $200 million in annualized cost savings, divested its stake in Endurance Specialty Holdings, Ltd., and recently sold its insurance underwriting business in addition to its claims and wholesale brokerage businesses. Fitch views Aon's focus on its core businesses positively, since it should enable the company to continue to reduce expenses and increase organic profitable growth.

Fitch has affirmed the following ratings with a Stable Outlook:

Aon Corporation

--IDR at 'BBB+';

--$225 million 7.375% senior debt due Dec. 14, 2012 at 'BBB+';

-- Short-term IDR at 'F2';

--Commercial paper at 'F2'.

Aon Capital A

--$726 million 8.205% trust preferred capital securities due Jan. 1, 2027 at 'BBB'.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

COPYRIGHT 2008 Business Wire
COPYRIGHT 2008 Gale, Cengage Learning