Moody's rates Brown & Brown notes Baa3

Moody's Investors Service said it assigned a Baa3 rating to $350 million of 10-year senior unsecured notes being issued by Brown & Brown, Inc.

The notes are being issued off Brown & Brown's multi-purpose shelf registration, Moody's explained.

The proceeds will be used to pay down its revolving credit facility, which was drawn in November 2018 to purchase the Hays Group, Inc., its largest acquisition to date.

The outlook is stable.

The rating reflects the company's top-six market position in United States insurance brokerage, along with its expertise in serving middle market clients, consistently strong operating margins and healthy free cash flow, Moody's said.

These strengths are tempered by the company's moderate size relative to the largest global brokers, as well as execution risks associated with the Hays integration and costs of ongoing technology initiatives, the agency said.

The agency also said it expects Brown & Brown to continue pursuing a combination of organic growth and acquisitions.

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