Moody’s: Willis to negative

Moody’s Investors Service said it affirmed the Baa3 senior unsecured debt rating of Willis Group Holdings plc and changed the outlook to negative from stable.

This action follows news that Willis plants to acquire the remaining 70% it does not currently own of Gras Savoye for about €550 million, including the repayment of third-party debt, Moody’s said.

The proposed acquisition would expand Willis’s global network, enhancing its market presence as the world’s third-largest insurance broker, the agency said.

But, the negative outlook highlights the potential strain on Willis’s cash and management resources related to this and other smaller acquisitions, Moody’s said.

The negative outlook also considers the multi-year restructuring program that the company began last year, the agency added.

The proposed acquisition builds on a long working relationship between Willis and Gras Savoye, Moody’s said, and strengthens the group’s international network.

But the company’s relatively high financial leverage and challenges associated with acquisitions and the ramp-up of its four-year restructuring program tempers those benefits, the agency said.

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