Marsh & McLennan Cos. Inc.
) announced the pricing of senior unsecured notes worth $500
million in a two-part offering. The proceeds are expected to be
utilized for enhancing business operations as well as to redeem
$250 million of long-term notes that are due for maturity in
Accordingly, one part of the long-term notes are worth $250
million and are dated to mature in 2018. These five-year fixed
rate notes bear an interest of 2.55%. The remaining tranche of
$250 million notes are slated to mature in 2023. These ten-year
fixed rate senior notes carry an interest of 4.05%.
Marsh & McLennan appointed BofA Merrill Lynch of
Bank of America Corp.
), Deutsche Bank Securities of
Deutsche Bank AG
), Goldman, Sachs & Co. of
Goldman Sachs Group Inc.
HSBC Holdings plc
) as joint book-running managers for the offering. The company
also appointed co-managers, which include
Barclays Capital plc
JP Morgan Chase & Co.
Meanwhile, Moody's Investor Service of
) have casted a rating of "Baa2" to both the set of notes, with a
positive outlook. Additionally, the ratings agency affirmed its
ratings of "Baa2" and "P-2" rating on Marsh & McLennan's
unsecured long-term debt and short-term debt, respectively.
While the ongoing slow pace of growth in the financials of
Marsh & McLennan Given the low interest rate environment and
sluggishness across the U.S. and European economies, growth in
the financials of Marsh & McLennan continues to be slow.
Nevertheless, Moody's appreciate the company's financial
flexibility. The optimism also derives from Marsh &
McLennan's healthy and diverse business model and its strong
global presence in over 100 countries.
Meanwhile, the latest notes issue to refinance existing notes
will not have any material effect on the credit profile, thereby
maintaining its debt-to-EBITDA ratio between 2.5x and 3.0x. Along
with a healthy financial leverage, balance sheet and coverage
ratios, a net profit margin of about 12% and adjusted operating
margin of 19.4%, in the first half of 2013, the company showcases
modest financial improvement, thereby paving the way for
enhancing operating leverage.
While Marsh & McLennan carries a Zacks Rank #3 (Hold),
Moody's carries a Zacks Rank #2 (Buy).
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