Aon Corp. to offer $1.5 billion in senior notes to fund acquisition of Hewitt Associates
By APWednesday, September 8, 2010
Aon to sell $1.5B in debt to fund Hewitt buyout
CHICAGO — Aon Corp. said Wednesday it will sell $1.5 billion in senior unsecured notes to help fund its $4.9 billion acquisition of human resources firm Hewitt Associates Inc.
The insurance company said the notes will be offered in three series. The first $600 million will mature on Sept. 30, 2015 and bear interest at a fixed annual rate of 3.5 percent. A second $600 million will come due in September 2020 and carry a 5 percent annual interest rate. The final $300 million will mature in 2040 and carries a fixed annual interest rate of 6.25 percent.
The offering is expected to close on Friday.
Aon said net proceeds will be used in connection with the Hewitt acquisition. After the offering closes, the funds will be placed in an escrow account to be held until the deal is complete. The notes are being issued in lieu of drawing on a senior bridge term loan credit agreement that Aon executed last month.
Credit Suisse Securities, Morgan Stanley & Co., Banc of America Securities, Deutsche Bank Securities and RBS Securities served as joint book-running managers. Aon Benfield Securities, ANZ Securities, Loop Capital Markets, RBC Capital Markets Corp., UBS Securities and Wells Fargo Securities served as co-managers in the offering.
Tuesday, Fitch Ratings said it expects to issue an investment-grade rating of “BBB+” on the offering.
In morning trading, Aon shares gained 46 cents to $38.04.
