8-KMaterial AgreementsFinancial Events

MARSH & MCLENNAN COMPANIES, INC. 8-K Report, Material Agreement (Oct 3, 2005)

Filed October 3, 2005For Securities:MRSHMMC

Summary

Marsh & McLennan Companies, Inc. (MRSH) filed an 8-K on October 3, 2005, reporting a significant financing event. The company's special purpose subsidiaries have secured a new $475 million mortgage loan for its New York headquarters. This new loan, bearing a fixed interest rate of 5.701% and maturing in October 2035, replaces an existing $200 million mortgage, effectively refinancing a substantial portion of the property's financing. This transaction is notable as it refinances the company's primary headquarters building and provides additional capital. The loan is secured by a first mortgage lien on the building's condominium interests and a first priority assignment of leases and rents. Importantly, the loan is non-recourse to the Company and its subsidiaries, with certain exceptions, and includes a "springing lease" provision tied to default events and credit rating downgrades, offering a layer of protection for the lender.

Key Highlights

  • 1Marsh & McLennan Companies, Inc. (MRSH) entered into a $475 million mortgage loan agreement for its headquarters at 1166 Avenue of the Americas, New York.
  • 2The new loan replaces an existing $200 million mortgage on the property.
  • 3The loan bears a fixed annual interest rate of 5.701%.
  • 4The loan has a maturity date of October 2035.
  • 5The financing is secured by a first mortgage lien on the building's condominium interests and a first priority assignment of leases and rents.
  • 6The loan is non-recourse to the Company and its subsidiaries, subject to specific exceptions.
  • 7A "springing lease" is in place to protect the lender in case of default or credit rating downgrades.

Frequently Asked Questions

The primary purpose of this filing is to report the entry into a material definitive agreement, specifically a new $475 million mortgage loan for Marsh & McLennan's New York headquarters.

This new $475 million loan replaces an existing $200 million mortgage on the headquarters building, effectively refinancing the property with a larger sum and a longer maturity.

The loan has a fixed annual interest rate of 5.701% and matures in October 2035. It is secured by the property and its rental income.

No, the loan is structured as non-recourse to the Company and its subsidiaries, meaning the lender's recourse is generally limited to the collateral (the property), with specific exceptions for certain prohibited actions by the borrowers.