8-KMaterial AgreementsFinancial EventsExhibits & Filings

Aon plc 8-K Report, Material Agreement (Mar 8, 2011)

Filed March 8, 2011For Securities:AON

Summary

Aon Corporation (Aon) filed an 8-K on March 8, 2011, primarily to report the issuance of Cdn$375 million in Senior Unsecured Debentures due March 8, 2018. These debentures were issued by Aon Finance N.S. 1, ULC, an indirect wholly-owned subsidiary, with an unconditional guarantee from Aon Corporation. The primary purpose of this debt issuance was to refinance existing debt that was maturing in April 2011. The new debentures carry a fixed annual interest rate of 4.76%, payable semi-annually, which is a slight reduction from the 5.05% rate on the debt being repaid. The Indenture governing the new debentures includes provisions for redemption at the issuer's option and mandates repurchase by the issuer under specific 'Change of Control Repurchase Event' scenarios, which involve both a change of control transaction and certain rating downgrades. This proactive refinancing aims to manage Aon's debt obligations and interest expense.

Key Highlights

  • 1Aon subsidiary issued Cdn$375 million in Senior Unsecured Debentures maturing in March 2018.
  • 2Aon Corporation unconditionally guarantees the principal and interest payments on the debentures.
  • 3The new debentures bear a fixed interest rate of 4.76% per annum.
  • 4Proceeds from the issuance will be used to repay Cdn$375 million of existing debt due April 12, 2011.
  • 5The Indenture allows Aon to redeem the debentures under certain conditions.
  • 6A 'Change of Control Repurchase Event' provision requires repurchase if control changes and credit ratings are downgraded.
  • 7The refinancing effectively replaces maturing debt with new, slightly lower-cost long-term financing.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose the entry into a material definitive agreement, specifically the issuance of Cdn$375 million in Senior Unsecured Debentures by Aon's subsidiary, Aon Finance N.S. 1, ULC, and Aon Corporation's guarantee of these debentures.

This issuance is part of a debt refinancing strategy. The Cdn$375 million raised will be used to repay an equivalent amount of Aon's debt securities that were due to mature on April 12, 2011. This allows Aon to replace maturing debt with new, long-term financing.

The new debentures have a principal amount of Cdn$375 million, mature on March 8, 2018, and carry a fixed annual interest rate of 4.76%, payable semi-annually. Aon Corporation provides an unconditional guarantee for these obligations.

Yes, the Indenture includes covenants that restrict mergers, consolidations, or significant asset transfers unless certain conditions are met. Additionally, bondholders have the right to demand repurchase of their debentures at 101% of the principal plus accrued interest in the event of a 'Change of Control Repurchase Event', defined as a change of control coupled with specific credit rating downgrades.