Fitch affirms Willis

Fitch Ratings said it affirmed Willis Group Holdings Ltd.'s issuer default rating at BBB and Willis North America Inc.'s issuer default rating, $250 million senior unsecured notes due 2010, $350 million senior unsecured notes due 2015 and $600 million senior unsecured notes due 2017 at BBB.

The outlook is stable.

The agency said the ratings reflect Willis' superior operating performance, excellent operating margins relative to peers, strong cash flow, manageable although increasing debt levels, established market position and management experience.

These positives are offset by increased uncertainty following recent changes to Willis' capital structure and management's recent indication of further changes to come, Fitch said. Specifically, Willis North America 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 ratio fell to an annualized level of 1.7 times for the first nine months of 2007 from 1.3 times in 2006.

Additionally, in November, Willis announced that its board authorized the repurchase of an additional $1 billion of common shares, which is expected to largely be financed with new debt. As a result, Fitch believes that Willis' key credit fundamentals will continue to worsen in the near to medium term.

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