S&P may downgrade Aon on Benfield acquisition announcement

SAN FRANCISCO (MarketWatch) — Standard & Poor’s said late Friday it may downgrade the ratings of Aon Corp. following the company’s announcement it will acquire reinsurance and risk intermediary Benfield Group for about $1.4 billion. S&P has a BBB+ counterparty credit rating on Aon. “The rating action reflects the uncertainty regarding the transaction’s effects on the company’s cash flows, capital structure, and coverage ratios (adjusted fixed-charge coverage) in light of its continued support of its capital-allocation priorities (i.e., share-repurchase program, pension liability management, and acquisition funding),” S&P said in a statement.
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