MMC Still on CreditWatch Negative

S&P announced that its “BBB” long-term counterparty credit and senior debt ratings on Marsh & McLennan Cos. will remain on CreditWatch negative.

The decision follows the announcement that MMC closed on a new $1.3 billion term loan facility and executed a $1.7 billion amendment of revolving facilities consistent with the commitment letter disclosed in MMC’s Nov. 17, 2004, 8K filing, according to S&P.

The rating service considers MMC’s closing on the restructured credit facilities is a positive event and consistent with the expectation that MMC has the resources and financial flexibility to manage its liquidity requirements.

However, S&P indicated that while it expects MMC’s financial profile to be in compliance with the terms of the restructured credit facilities, the ratings reflect expectations of diminished cash flow and earnings from the termination of MSAs, a modest adverse impact (up to 5 percent revenue loss) to Marsh’s business outlook, and that MMC will have the financial resources to manage any settlements reached in connection with outstanding legal and regulatory investigations.

Keeping the ratings on CreditWatch with negative implications reflects the continued ongoing uncertainties of this evolving situation, particularly the impact on Marsh’s competitive position, earnings, and cash flow. Short of criminal charges being filed against the company by a legal authority, S&P continues to believe that the diversified operational profile of MMC, with several well-positioned operating business, will enable it to remain a viable and profitable entity into the future.