Moody's downgrades Willis

Moody's Investors Service said it downgraded the senior unsecured debt rating of Willis North America Inc. to Baa3 from Baa2.

The action comes after Willis said it completed the acquisition of Hilb Rogal & Hobbs Co. for $2.1 billion, including the assumption of about $400 million of debt, concluding a review for downgrade announced on June 10.

The outlook is negative.

Moody's said the downgrade reflects a decline in financial flexibility as a result of the substantial reliance on debt to help fund the acquisition, the agency said.

Concerns also include the integration risk of the sizable merger, price softening in the property casualty insurance market, the weak economy and the current turmoil in credit markets, the agency noted.

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