Fitch Ratings Affirms Willis North America's 'BBB' IDR; Outlook Stable.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed the following ratings on Willis North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. Inc. (WNA WNA World Nuclear Association (UK) WNA Wisconsin Nurses Association WNA Weather Normalization Adjustment WNA Wireless Network Access WNA Wireless Network Administration WNA Wednesday Night Acro WNA White Noise Acceleration ) and Willis Group Holdings Ltd. (Willis): Willis North America Inc. --Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) at 'BBB'; --$250 million senior unsecured notes due 2010 at 'BBB'; --$350 million senior unsecured notes due 2015 at 'BBB'; --$600 million senior unsecured notes due 2017 at 'BBB'. Willis Group Holdings Ltd. --IDR at 'BBB'. The Rating Outlook is Stable. The Ratings reflect Willis' superior operating performance, excellent operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: relative to peers, strong cash flow, manageable although increasing debt levels, established market position, and management experience. Fitch believes that Willis' insurance brokerage operations have outperformed those of its closest competitors for several years and that it will continue to do so in the near term. These positives are offset by increased uncertainty following recent changes to Willis' capital structure and management's recent indication of further changes to come. Specifically, WNA issued $600 million of debt in March 2007, a significant portion of which was used to repurchase common shares. As a result, Willis' consolidated debt-to-EBITDA and operating EBIT-interest coverage ratios, which were 1.3 times (x) and 15x in 2006, respectively, deteriorated to still strong annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. levels of 1.7x and 10x, respectively, for the first nine months of 2007. Additionally, in November 2007, Willis announced that its board had authorized the repurchase of an additional $1 billion of common shares, which is expected to largely be financed by the issuance of additional debt. As a result, Fitch believes that Willis' key credit fundamentals will continue to worsen in the near to medium term. Fitch expects debt-to-EBITDA, interest coverage, and debt-to-total-capital ratios to remain within ranges that are adequate to support existing ratings, as long as the company continues to demonstrate an operating performance similar to current levels. However, if Willis' debt-to-EBITDA multiple were to exceed 2.5x or if the company's interest coverage were to drop below 5x, it could lead to a rating downgrade. In addition to the foregoing, Fitch also notes that Willis maintains a significant amount of intangible assets, which is common in the brokerage industry due to acquisition activity. Fitch also recognizes Willis' smaller size and comparative lack of business diversity relative to its larger global broker peers, and the effects of the property/casualty insurance industry's cyclical nature on Willis' earnings and cash flow. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. The ratings above have been initiated by Fitch as a service to investors. |
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