June 5, 2012 / 9:02 PM / 5 years ago

TEXT-Fitch affirms Marsh & McLennan IDR at 'BBB'

 June 5 - Fitch Ratings today affirmed its ratings for Marsh & McLennan
Companies, Inc. (MMC), including MMC's Issuer Default Rating (IDR) at
'BBB' and senior unsecured debt rating at 'BBB'. A full list of rating actions
appears at the bottom of this release. The Rating Outlook is Stable.	
	
The affirmation follows an updated review of MMC's financial performance,
balance sheet strength, liquidity, and debt servicing capabilities, which
revealed continuation of MMC's recent trend of improved operating performance
and stronger credit metrics that began in 2011.	
	
In the first quarter of 2012, MMC's consolidated pre-tax profit margin improved
to 17.4% versus 16.6% in the prior year period. The company's Risk & Insurance
Services (RIS) and Consulting segments both reported healthy organic revenue
growth and margin expansion during the period.	
	
MMC's 1Q12 debt-to-annualized EBITDA ratio and EBITDA-to interest coverage
ratios both improved year over year and are strong for the current rating
category at 1.2x and 13.4x, respectively.	
	
For the full year 2011, the company's consolidated pre-tax profit margin
improved to 14.4% in 2011 versus 9.1% (12.9% excluding a $400 million net
litigation settlement) in 2010. MMC's debt-to- EBITDA ratio in 2011 (1.5x) and
EBITDA-to interest coverage ratio (10x) were solid for the current rating
category. Fitch expects both ratios to remain at or near these levels in the
near to medium term.	
	
The rationale for MMC's ratings includes the company's competitive position as
one of the world's largest diversified services firms, with major operations in
insurance brokerage and consulting. The ratings also reflect MMC's strong
financial flexibility. MMC reported approximately $1.4 billion of cash and cash
equivalents on its balance sheet as of March 31, 2012 and also maintains a $1
billion multicurrency unsecured revolving credit facility that expires October
2016. There were no borrowings under this facility as of March 31, 2012.	
	
Partially offsetting these favorable factors is that for several years prior to
2011, MMC's earnings had been pressured by litigation charges, restructuring
expenses, and a challenging operating environment. As a result, until recently,
MMC's debt-to-EBITDA ratio (2.3x in 2010) and EBITDA-to interest coverage ratio
(5.6x in 2010), were at levels that Fitch views as merely adequate for the
current rating category.	
	
Long-term rating triggers that could result in a Positive Rating Outlook or
upgrade include sustained improvement in operating performance on an absolute
basis and relative to peers; a debt-to-EBITDA ratio at a consistent level of
under 1.5x; and interest coverage as measured by an EBITDA-to-interest ratio
near 10x.	
	
Key ratings triggers that could lead to a Negative Rating Outlook or rating
downgrade include MMC'S debt-to-EBITDA multiple exceeding 3.0x; the company's
EBITDA-to-interest coverage ratio deteriorating to levels in the low single
digits; or if the company were to incur additional, material charges arising
from litigation or regulatory rulings.	
	
Fitch has affirmed the following ratings with a Stable Outlook:	
	
Marsh & McLennan Companies, Inc.	
--IDR at 'BBB';	
--Short-term IDR at 'F2';	
--Commercial paper at 'F2'.	
	
Fitch has affirmed MMC's senior debt as follows:	
	
--$250 million 4.85% senior debt due 2013 at 'BBB';	
--$320 million 5.375% senior debt due 2014 at 'BBB';	
--$480 million 5.75% senior debt due 2015 at 'BBB';	
--$250 million 2.30% senior debt due 2017 at 'BBB';	
--$400 million 9.25% senior debt due 2019 at 'BBB';	
--$500 million 4.80% senior notes due 2021 at 'BBB';	
--$300 million 5.875% senior debt due 2033 at 'BBB'.	
	
	
Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings. The issuer did not participate in
the rating process, or provide additional information, beyond the issuer's
available public disclosure.	
	
Applicable Criteria and Related Research:	
--U.S. Insurance Broker Industry Sector Credit Factors' (May 4, 2012);	
--'Corporate Rating Methodology' (Aug. 12, 2011).	
	
Applicable Criteria and Related Research:	
U.S. Insurance Broker Industry Sector Credit Factors	
Corporate Rating Methodology	
	
 (New York Ratings Team)	
 

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