8-KMaterial AgreementsFinancial EventsExhibits & Filings

Aon plc 8-K Report, Material Agreement (Feb 4, 2015)

Filed February 4, 2015For Securities:AON

Summary

Aon plc (AON) has filed an 8-K report on February 4, 2015, detailing a significant update to its financing arrangements. The company entered into a new $900 million unsecured five-year revolving credit facility, replacing a previous €650 million facility. This new credit agreement, effective February 2, 2015, provides Aon with greater financial flexibility and a longer maturity horizon, extending to February 2, 2020, with options for extensions. This move signifies Aon's proactive management of its capital structure and demonstrates continued access to credit markets. The new facility includes covenants related to financial performance, such as a minimum consolidated adjusted EBITDA to consolidated interest expense ratio of 4.00 to 1.00 and a maximum consolidated funded debt to consolidated adjusted EBITDA ratio of 3.25 to 1.00. These covenants suggest a commitment to maintaining a healthy balance sheet and operational efficiency.

Key Highlights

  • 1Aon plc entered into a new $900 million unsecured five-year revolving credit agreement.
  • 2The new facility replaces a prior €650 million multi-currency revolving credit facility.
  • 3The agreement matures on February 2, 2020, with options for two one-year extensions.
  • 4Borrowings can be made in USD, GBP, or EUR.
  • 5Interest rates are based on either a eurocurrency rate (LIBOR/EURIBOR) or an alternate base rate plus an applicable margin.
  • 6Key financial covenants include a minimum consolidated adjusted EBITDA to interest expense ratio of 4.00:1.00 and a maximum consolidated funded debt to adjusted EBITDA ratio of 3.25:1.00.
  • 7The new credit agreement signifies proactive management of Aon's liquidity and financial flexibility.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report Aon plc's entry into a new $900 million five-year revolving credit agreement and the termination of its previous credit facility.

The new revolving credit facility has a principal amount of $900 million and a term of five years, with a maturity date of February 2, 2020. It also includes provisions for two optional one-year extensions.

The new agreement includes covenants such as maintaining a ratio of consolidated adjusted EBITDA to consolidated interest expense of no less than 4.00 to 1.00, and a ratio of consolidated funded debt to consolidated adjusted EBITDA of no more than 3.25 to 1.00 (subject to certain exceptions).

This filing announces the creation of a new credit facility and the termination of an older one. The new facility provides Aon with access to $900 million in potential borrowing capacity and replaces the previous €650 million facility. The impact on the company's overall debt structure would depend on its current utilization of these facilities and other outstanding debt.