Moody's rates Man Group notes

Moody's Investors Service said it assigned a prospective A3 rating to Man Group Finance Inc.'s $100 million guaranteed senior notes due 2009, 2011 and 2014, respectively, at the company's senior unsecured rating of A3.

Man is issuing the senior notes to repay drawings under its bank facilities.

Moody's recently revised the outlook for all ratings to negative, noting that the growth of the asset management business over the last 18 months has led to increasing demands on Man's balance sheet and cash flow and resulted in rising effective leverage and reduced debt coverage ratios.

A leading global provider of alternative investment products, Man has grown rapidly. Funds under management have risen from $26.1 billion at March 31, 2003 to an estimated £38 billion a year later.

During fiscal 2003, Man has demonstrated its continued access to the capital markets, having successfully raised £178.1 million to finance a major acquisition, issued £400.0 million in exchangeable bonds and refinanced significant amounts of its loans to funds. During 2004, the Group raised a further $160 million in subordinated debt to meet the capital requirements of its brokerage business.

Moody's said Man's success, however, is founded on its ability to develop and deliver principal and multi-strategy structured investment vehicles, many of which require the company to provide finance to funds both at launch and, potentially, later during the life of the funds. While the Group has successfully refinanced much of its lending to funds, as it grows so do the demands, both actual and potential, on its balance sheet.

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