Fitch rates Aon notes BBB+

Fitch Ratings said it expects to assign a BBB+ rating to the proposed €500 million 12-year senior unsecured notes issuance by Aon plc.

Fitch also said it affirmed all of Aon's ratings, including its issuer default rating at BBB+, short-term issuer default rating at F2, commercial-paper rating at F2, along with the BBB+ ratings on its $350 million 4% senior debt due 2023, $256 million 4.25% senior debt due 2042 and $250 million 4.45% senior debt due 2043.

The outlook is stable.

The new notes are fully and unconditionally guaranteed by Aon Corp. and the ratings are therefore based on Aon Corp.'s BBB+ issuer default rating, which was affirmed, the agency said.

Also affirmed includes the BBB+ ratings on Aon Corp.'s $600 million 3.5% senior debt due 2015 and $500 million 3.125% senior debt due 2016, $600 million 5% senior debt due 2020, along with the BBB- rating on its $521 million 8.205% junior subordinated deferrable interest debentures due 2027 and BBB+ rating on its $300 million 6.25% senior debt due 2040.

The agency also affirmed Aon Corp.'s short-term issuer default rating at F2 and commercial-paper rating at F2.

The net proceeds from this new senior debt issuance will be used to refinance Aon Services Luxembourg & Co SCA's senior unsecured debt of the same amount due in July 2014.

The issuer default rating of BBB+ on Aon Services also was affirmed, along with the BBB+ rating on its €500 million 6.25% senior debt due 2014.

Fitch said it views the proposed debt favorably as the new senior debt will likely be issued at an attractive rate given current market conditions and will have a long-dated maturity, resulting in an improved liquidity profile with reduced near-term refinancing risk.

Fitch said it does not expect change to pro forma financial leverage following the debt issuance since the proceeds will be used to refinance existing debt.

The ratings reflect Aon's strong competitive position, balance sheet and cash flow generation, very good financial flexibility and financial leverage, the agency said.

The ratings also consider Aon's favorable competitive position among the top three global brokers with major operations in reinsurance brokerage and human capital consulting/outsourcing, S&P said.

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