S&P ups HUG to stable

Standard & Poor's said that it revised the outlook on HUB International Ltd. to stable from negative and affirmed the B counterparty credit and CCC+ senior debt ratings on HUB.

The recovery rating on HUB's senior secured debt remains 3 (50%-70% recovery) and the recovery rating on its unsecured debt remains 6 (0%-10% recovery).

S&P revised the outlook to stable because HUB has met performance and debt-servicing expectations despite continued challenging market conditions, the agency said.

S&P said it expects that the company's operating performance will continue to improve in 2011, the agency added.

The ratings reflect its limited financial flexibility, which is a function of its highly leveraged capital structure, pressure on organic revenue growth and profitability and near-term execution risk because of its debt-funded acquisition strategy, the agency said.

The ratings consider HUB's success in enhancing its competitive position through its acquisition strategy, its good earnings diversification within the brokerage arena and a consistent history of favorable operating results and margins relative to its peers', the agency added.

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