Aon Corporation announced yesterday its execution of a $450 million Term Credit Agreement (the "Agreement"). The loans incurred under the Agreement will mature on October 1, 2013 and will bear interest at a variable annual rate of Libor plus a margin which varies depending on the Company's public debt ratings. As of the closing of the Agreement, the applicable interest rate is Libor plus 137.5 basis points, currently 1.56%.
Net proceeds of the loans under the Agreement were used, together with the net proceeds of the $500 million of our Senior Unsecured Notes issued May 24, 2011, for the complete repayment and termination of Aon's $1 billion three-year Term Credit Agreement, which was entered into in connection with the merger transaction with Hewitt Associates Inc., had an outstanding principal balance of approximately $450 million as of June 15, 2011 (after application of the proceeds from the sale of the Senior Unsecured Notes), and bore interest at a variable annual rate of Libor plus 250 basis points, currently 2.71%.
In the second quarter, Aon will record a non-cash charge in interest expense of approximately $19 million as a result of the accelerated amortization of deferred financing costs associated with the repaid Term Credit Agreement.
Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley Senior Funding, Inc. acted as joint book-runners and lead arrangers with Citigroup Global Markets, Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Goldman Sachs Bank USA, RBS Securities Inc. and Wells Fargo Securities, LLC as co-arrangers under the Agreement.
|
