What is the primary purpose of this new credit facility?

The primary purpose of this new $1.2 billion credit facility is to provide Marsh & McLennan Companies, Inc. with ongoing financial flexibility and a consolidated borrowing capacity. It replaces older, smaller credit lines and extends their maturity.

What is the total value and duration of the new credit facility?

The new credit facility is valued at $1.2 billion and has a term of five years, expiring on December 9, 2010.

Are there any specific financial conditions or covenants associated with this facility?

Yes, the facility contains financial covenants that set limits on MMC's maximum permitted ratio of debt to adjusted EBITDA and minimum permitted ratio of adjusted EBITDA to interest expense. These are standard provisions to ensure the company maintains a healthy financial profile.

How does this new facility compare to the previous credit arrangements?

This new $1.2 billion facility is a significant upgrade and consolidation compared to the previous $1.0 billion and $700 million revolving credit facilities. It provides a larger borrowing capacity and a unified expiration date.

MRSH/MMC 8-K: Financial Events

Summary

Marsh & McLennan Companies, Inc. (MMC) has entered into a new $1.2 billion multi-currency five-year unsecured revolving credit facility, effective December 9, 2005. This facility replaces previous credit lines totaling $1.7 billion ($1.0 billion and $700 million), which were set to expire in 2007 and 2009 respectively. The new facility provides MMC with enhanced financial flexibility and a consolidated borrowing capacity. It is guaranteed by the parent company for subsidiary borrowings and includes standard financial covenants related to debt to adjusted EBITDA and adjusted EBITDA to interest expense ratios.

Key Highlights

1Establishment of a new $1.2 billion multi-currency, five-year unsecured revolving credit facility.
2The new facility consolidates and replaces existing credit facilities totaling $1.7 billion.
3The facility maturity date is December 9, 2010.
4Borrowings under the facility are guaranteed by Marsh & McLennan Companies, Inc. for its foreign subsidiaries.
5The credit agreement includes financial covenants regarding debt to adjusted EBITDA and adjusted EBITDA to interest expense ratios.
6The facility permits the issuance of letters of credit, enhancing operational flexibility.
7Joint lead arrangers include Citigroup Global Markets Inc., Banc of America Securities LLC, and Deutsche Bank Securities Inc.

MARSH & MCLENNAN COMPANIES, INC. 8-K Report, Financial Obligation (Dec 14, 2005)

Summary

Key Highlights

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