CHICAGO, May 16 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has
reaffirmed the 'AA-' (Double-A-Minus) senior debt rating of Aon Corporation
(Aon) following its recent $250 million note issuance. DCR has also
reaffirmed the company's 'D-1+' (D-One-Plus) commercial paper rating. The
Rating Outlook is Stable.
The rating reaffirmation considers that financial leverage will not change
as a result of the new issue, as the newly raised capital will be used to pay
down commercial paper. At March 31, 2000, debt-to-total capital (excluding
the impact of FAS 115) was 32 percent. Trust preferred securities, which DCR
believes to have qualities of both debt and equity capital, were 14 percent of
total capital at March 31, 2000. DCR anticipates that debt as a percentage of
total capital will be managed in the mid-20s over the long term.
DCR has recently considered the charges the company incurred during 1999.
While the recent charges are viewed as a negative event by DCR, the
circumstances causing the charge are considered to be one-time items. If
these events were to be repeated in the near future and cause strain on the
company's "run-rate" operating margins, DCR would then consider these events
to add negative pressure to Aon's fixed-income ratings.
The current ratings reflect Aon's well-defined market position and strong
operating fundamentals, including multiple revenue sources and global
geographic diversification. Partially offsetting these strengths are
competitive pressures in the cyclically sensitive property/casualty brokerage
services. While potential risks associated with Aon's acquisition strategy
exist, the company's acquisition track record has been strong.
For additional information, visit DCR's Web site at http://www.dcrco.com
(Quick Search: Aon). DCR's research is also available on Bloomberg at DCR
and First Call's BondCall Direct/Research Direct at http://www.firstcall.com,
as well as through other third-party providers.
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
http://www.firstcall.com
CONTACT:
Peter F. Patrino, CFA, 312-368-3266,
patrino@dcrco.com, or Julie A. Burke, CPA, CFA, 312-368-3158,
burke@dcrco.com, both of Duff & Phelps Credit Rating Co.
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