S&P rates Aon debt BBB+

Standard & Poor's said it assigned a BBB+ rating to the proposed C$375 million senior unsecured debt issuance by Aon Finance NS1 ULC, a Canadian-domiciled intermediate holding company ultimately owned by Aon Corp. The rating is based on an unconditional guarantee by Aon Corp.

At the same time, S&P affirmed Aon's BBB+ counterparty credit and senior unsecured debt ratings and its A-2 commercial paper rating. The outlook is positive.

Aon Finance intends to use the proceeds from this issuance to pay down amounts currently outstanding under its current eurocredit facility. Accordingly, adjusted financial leverage at both companies will not be affected by this issuance.

The senior unsecured debt rating is supported by Aon's strong competitive position, materially improved operating performance and strong liquidity, the agency said. These strengths are somewhat offset by the company's operating performance and financial profile, which has only recently improved.

The ratings also reflect the potential financial and competitive impact from outstanding regulatory and legal disputes including the $190 million settlement agreement that included the public allegation of fraud and anticompetitive actions by the Attorneys General of Connecticut, Illinois and New York, the Illinois Acting Director of Insurance, and the New York State Insurance Superintendent as well as the potential financial impact from ongoing legal disputes with other parties, including Lloyds of London, the agency added.

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