Willis put on RWN by Fitch

US

Rating agency, Fitch Ratings, has placed the ratings of Willis North America (WNA) and Willis Group Holdings on Rating Watch Negative following Willis’ acquisition of US broking group, Hilb Rogal & Hobbs (HRH) for $1.7bn. Willis will additionally assume $400mn of HRH’s debt. Fitch expects to downgrade Willis and WNA’s ratings by at least one but not more than two notches after the HRH acquisition is completed during the fourth quarter of 2008. Fitch said its rating action reflected an expectation of significantly increased debt leverage at Willis following the completion of the acquisition. Willis management said that it expected the combined entity’s debt to earnings ratio to increase 3.2 times. Fitch noted that this was well above its maximum comfort level of roughly 2.5 times for insurance brokers at Willis’ current rating level. Willis’s debt-to-total capital ratio is expected to be in the high 40% once the acquisition of HRH is completed.