Moody's: Man Group outlook negative

Moody's Investors Service said it changed the outlook for the A3 senior debt rating of Man Group plc to negative from stable, citing the company's increasing use of leverage and externalization of fund financing.

Ratings affected include the company's A3 rating on Forester Ltd.'s £400.0 million 3.75% guaranteed exchangeable bond due 2009.

Through both strategic acquisitions and organic growth, Man Group has become a leading global provider of alternative investment products to both retail and, increasingly, institutional clients. Funds under management have grown from $26.1 billion at year-end 2003 to $31.5 billion at the end of the first half of fiscal 2004.

Moody's said Man Group's success is founded on its ability to develop and deliver principal and multi-strategy structured investment vehicles, many of which require the company to provide financing to funds both at launch and, potentially, later during the life of the funds. During fiscal 2003, the company successfully raised £178.1 million in equity to finance a major acquisition, issued £400.0 million in exchangeable bonds and refinanced significant amounts of its loans to funds.

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