Fitch rates Aon notes BBB+

Fitch Ratings said it expects to assign a BBB+ rating to the proposed 30-year senior unsecured notes issuance by Aon plc.

Fitch also affirmed Aon’s issuer default rating BBB+, $350 million 4% senior debt due 2023 at BBB+, $600 million 3.5% senior debt due 2024 at BBB+, €500 million 2.875% senior debt due 2026 at BBB+, $256 million 4.25% senior debt due 2042 at BBB+, $250 million 4.45% senior debt due 2043 at BBB+, $550 million 4.6% senior debt due 2044 at BBB+, short-term issuer default rating at F2 and commercial-paper rating at F2.

The agency also said it affirmed Aon Corp.’s issuer default rating at BBB+, $600 million 3.5% senior debt due 2015 at BBB+, $500 million 3.125% senior debt due 2016 at BBB+, $600 million 5% senior debt due 2020 at BBB+, $521 million 8.205% junior subordinated deferrable interest debentures due 2027 at BBB-, $300 million 6.25% senior debt due 2040 at BBB+, short-term issuer default rating at F2 and commercial-paper rating at F2.

Fitch also affirmed Aon Services Luxembourg & Co SCA’s issuer default rating at BBB+.

The outlook is stable.

The new notes are fully and unconditionally guaranteed by Aon Corp. and the ratings are therefore based on Aon’s existing BBB+ issuer default rating.

The proceeds from this new issuance will be used for general corporate purposes, likely including the refinancing of senior debt maturing later in 2015.

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.

Ultimately, the agency said it does not expect material change to pro forma financial leverage, since the proceeds will likely be used in part to refinance existing debt.

The ratings reflect Aon’s strong competitive position, balance sheet and cash flow generation, good financial flexibility and manageable financial leverage, Fitch said.

Although Aon’s merger and acquisition activity has increased in the last few quarters, it has been below its normal levels following the Hewitt acquisition, the agency said.

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