S&P cuts some Aon ratings

Standard & Poor's said it lowered its counterparty credit rating on Aon Corp. to BBB+/A-2 from A-/A-2 and lowered its preferred stock rating on Aon to BBB- from BBB.

In addition, S&P placed all these ratings on CreditWatch with negative implications.

"The rating was lowered to reflect our revised expectations for Aon's earnings and cash flow given the recent announcement by various industry players that they are suspending market service agreements (MSAs)," explained S&P credit analyst Steven Ader.

MSAs are the agreements under which contingent commissions are received from insurers. S&P said it believes that the disruption to earnings resulting from the prospective suspension of MSAs materially reduces Aon's ability to improve its operating and financial profiles. This improvement had been factored into the previous ratings.

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