Moody's rates Hilb Rogal loan Ba3, raises outlook

Moody's Investors Service rated Hilb, Rogal and Hamilton Co.'s senior secured bank credit facility at Ba3. Furthermore, the outlook on the company's ratings was changed to positive from stable.

The facility replaces the company's previous facility and consists of a $160 million senior secured term loan B due June 1, 2007 and a $130 million revolver due Dec. 31, 2006. Security is the capital stock of each direct and indirect subsidiary of the company.

Ratings reflect the company's solid operating performance, consistent margins and capital growth, Moody's said. Hilb Rogal has continued to improve its tangible equity position, reduce financial leverage and increase interest and fixed charge coverage levels. In addition, Moody's believes that since insurance buyers and carriers are supportive of alternatives to the top brokers, and the company has a strong position within the second tier of brokers and a steady demand for risk management expertise, Hilb Rogal has a degree of downside protection regarding market share.

However, ratings also reflect substantial integration and execution risks emanating from the company's growth by acquisition strategy, the company's relatively high financial leverage profile, and competitive gap between Hilb Rogal and the top brokerage houses in terms of financial flexibility and global capabilities, Moody's added.

The change in outlook reflects the company's improving financial trends. Hilb Rogal's ability to sustain its margins, organically grow revenues, successfully integrate acquisitions and continue to improve other key financial measures such as retained cash flow to debt, debt to EBITDA, interest coverage and tangible capitalization will figure prominently into the ratings going forward, Moody's stated.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.