8-KMaterial Agreements

Aon plc 8-K Report, Agreement Terminated (Sep 13, 2010)

Filed September 13, 2010For Securities:AON

Summary

This 8-K filing by Aon Corporation on September 13, 2010, primarily reports on the termination of a material definitive agreement, specifically the Senior Bridge Term Loan Credit Agreement. This termination was initiated because Aon successfully secured alternative financing for its merger with Hewitt Associates, Inc. Instead of drawing on the $1.5 billion bridge loan, Aon issued $1.5 billion in Senior Notes across three maturity tranches (2015, 2020, and 2040) at varying interest rates. This move signifies a successful refinancing strategy that replaces a potentially more expensive or restrictive bridge facility with a longer-term debt structure. The filing also incorporates by reference previous disclosures regarding the merger and the bridge credit agreement, emphasizing that Aon will no longer have obligations under the bridge agreement beyond customary surviving clauses.

Key Highlights

  • 1Aon terminated its $1.5 billion Senior Bridge Term Loan Credit Agreement, originally established to finance the merger with Hewitt Associates.
  • 2The termination of the bridge loan was a result of Aon successfully issuing $1.5 billion in Senior Notes across three different maturities (2015, 2020, 2040).
  • 3The new Senior Notes consist of $600 million of 3.50% Senior Notes due 2015, $600 million of 5.00% Senior Notes due 2020, and $300 million of 6.25% Senior Notes due 2040.
  • 4This action effectively replaces the bridge financing with long-term debt, potentially offering more favorable terms and avoiding immediate repayment pressures.
  • 5The filing confirms that Aon will have no further obligations under the terminated Bridge Credit Agreement, except for standard indemnification and other surviving clauses.
  • 6The company reiterated its commitment to the merger with Hewitt Associates and referenced previous filings for detailed information on the transaction and associated risks.
  • 7The filing also includes a Safe Harbor statement outlining forward-looking statements and the various risks and uncertainties associated with the merger and Aon's business operations.

Frequently Asked Questions

Aon is terminating the agreement because it has successfully secured alternative, long-term financing for the Hewitt Associates merger through the issuance of $1.5 billion in Senior Notes. This means Aon no longer needs the bridge financing.

Aon issued an aggregate principal amount of $1.5 billion in Senior Notes, comprising $600 million of 3.50% Senior Notes due 2015, $600 million of 5.00% Senior Notes due 2020, and $300 million of 6.25% Senior Notes due 2040.

Replacing the bridge loan with Senior Notes is generally positive as it substitutes short-term, potentially higher-cost financing with longer-term debt. This provides Aon with more financial flexibility, removes immediate repayment pressures, and can help manage its debt maturity profile more effectively.

Aon will have no further obligations under the Bridge Credit Agreement other than certain customary surviving obligations, such as indemnification clauses.