Aon enters into $1 billion five-year replacement revolver

Chicago, Sept. 30 – Aon plc entered into a $1 billion five-year revolving credit facility that replaces an earlier $900 million facility that was signed in 2015 and was set to mature in February 2022, according to an 8-K filing with the Securities and Exchange Commission.

The new loan matures Sept. 28, 2026, subject to two optional one-year extensions.

Borrowings can be in dollars, sterling or euros.

The interest rate margin is based on the parent’s long-term debt rating. The margin for eurocurrency and Sonia advances starts at 101.5 basis points. For the five levels, the margin can go as low as 80.5 bps and as high as 130 bps.

The facility fee starts at 11 bps and ranges from 7 bps to 20 bps, based on ratings.

Aon Corp., Aon UK Ltd., Aon Global Holdings plc and Aon Global Ltd. are listed as borrowers on the loan.

Citibank, NA is the administrative agent.

HSBC Bank USA, NA and Morgan Stanley Senior Funding, Inc. are the syndication agents.

Citibank, HSBC Securities (USA) Inc. and Morgan Stanley Senior Funding, Inc. are joint lead arrangers and joint bookrunners.

The covenants relating to the ratio of consolidated adjusted EBITDA to consolidated interest expense specify a minimum of 4x, and the ratio of consolidated funded debt to consolidated adjusted EBITDA is limited to a maximum of 3.25x.

Proceeds will be used for general corporate purposes.

2017 revolver amendment

Aon also entered into a second amendment for its five-year revolving credit agreement from 2017 with Citibank as administrative agent.

The amendment changes the benchmark to Sonia for sterling loans, establishes procedures for the transition from Libor, modifies the applicable margins and facility fee to match the new revolver and aligns some other terms with the new loan.

The central modification in the pricing grid was that the third tier, where the company is currently, was lowered to 11 bps for the facility fee from 12.5 bps and the margin was lifted to 101.5 bps over the benchmark rate from 100 bps previously.

With the new revolver, the $900 million revolving loan it replaced was terminated.

Aon is a London-based provider of risk management, insurance and reinsurance brokerage and also human resources solutions and outsourcing services.

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