S&P Revises Outlook on Willis to Stable; Rates New Debt Issue ‘BBB-‘

September 23, 2009

Standard & Poor’s Ratings Services has revised its outlook on Willis Group Holdings Ltd. to stable from negative, and has affirmed our ‘BBB-‘ counterparty credit and senior unsecured debt ratings on Willis.

S&P also assigned its ‘BBB-‘ senior unsecured debt rating on Willis North America Inc.’s $250 million, 10-year senior notes, which are ultimately guaranteed by Willis Group Holdings Ltd. “The notes are also guaranteed by Willis’ wholly owned subsidiaries that are parents of Willis North America Inc. and will rank pari passu with the company’s existing senior unsecured notes,” S&P added. “The company expects to use the net proceeds to refinance its $250 million, 5.125 percent senior unsecured notes due in July 2010.

Credit analyst Tracy Dolin explained: “The outlook revision primarily reflects our view that Willis has changed its strategy to encompass a more disciplined financial risk tolerance posture. We believe the company will choose to deleverage its balance sheet over repurchasing shares in the short to intermediate term.”

S&P noted that “Willis has improved its cash-management capabilities over the past year and has taken several actions to help the group achieve this, including the freezing of its U.S. pension plan for future accrual.

“In addition, Willis might partially sell its ownership stake in Gras Savoye [a large French broker], which would further improve its leverage position. The stable outlook also follows the company’s repayment of the $750 million outstanding on its bridge loan due in September 2009 through a combination of debt financing, cash flow, and the marginal sale of noncore assets during the first half of 2009.”

Source: Standard & Poor’s – www.standardandpoors.com

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