OREANDA-NEWS. Fitch Ratings has assigned a senior unsecured debt rating of 'A-' to Marsh & McLennan Companies, Inc.'s (MMC) new issue of $350 million 3.3% senior notes due 2023. A full list of MMC's ratings follows at the end of this release.

KEY RATING DRIVERS

Fitch expects MMC to use the net proceeds of this offering for general corporate purposes. The company's debt maturities remain well-laddered and interest expense remains manageable as MMC was able to take advantage of the current low rate environment. Fitch expects that MMC's key credit ratios will continue to approximate recent levels over the next 12 - 24 months.

MMC's consolidated EBIT operating margin, debt-to-EBITDA ratio, and EBITDA-to interest coverage ratios have each been consistently strong and are projected to remain so following the incremental debt issue. Given MMC's prospects for solid earnings growth in 2016, Fitch expects these key credit metrics to remain well within guidelines for the current rating category. The ratings continue to reflect MMC's continued trend of improved operating performance and stronger credit metrics that has persisted for several years.

The company has successfully demonstrated consistent and material key credit metric improvement over the past several years. For the full year 2015, MMC's EBITDA-to-interest expense coverage was excellent at roughly 18x, and financial leverage as measured by debt-to-EBITDA remained moderate at 1.5x. Pro forma for the additional $350 million debt issuance, financial leverage will increase only modestly to 1.6x which is within Fitch's expectations.

The ratings also reflect MMC's strong balance sheet and financial flexibility. The company reported $1.4 billion of cash and equivalents at Dec. 31, 2015, and also maintains a $1.2 billion multicurrency unsecured revolving credit facility that expires in 2019. Fitch expects free cash flow to continue increasing over time due in part to expense reductions and projected earnings growth. Favorably, restructuring expenses have recently been immaterial, and share repurchases are considered to be discretionary in order to preserve liquidity ($1.4 billion repurchased in 2015).

RATING SENSITIVITIES

Key rating triggers that could lead to a downgrade if observed over a sustained period of time include:

--Debt-to-EBITDA exceeding 2.0x; and
--EBITDA-to-interest expense coverage deteriorating to levels below 10.0x; or
--If MMC incurred material charges arising from litigation or regulatory rulings that could affect long-term performance;
--If MMC were to report a material goodwill impairment that casts doubt on its ability to generate future earnings and cash flows.

Longer-term key rating triggers that could lead to an upgrade if observed over a sustained period of time include:

--Consolidated EBIT operating margins of 20% or better;
--Debt-to-EBITDA approaching 1.0x;
--EBITDA-to-interest expense in excess of 18.0x.

FULL LIST OF RATING ACTIONS

Fitch has assigned the following rating:

Marsh & McLennan Companies, Inc.
--$350 million 3.3% senior notes due 2023 'A-'.

Fitch currently rates MMC as follows:

Marsh & McLennan Companies, Inc.
--Short-term IDR 'F2';
--Commercial paper 'F2'.
--Long-term IDR 'A-';
--$250 million 2.30% senior debt due 2017 'A-';
--$250 million 2.55% senior debt due 2018 'A-';
--$300 million 2.35% senior debt due 2019 'A-';
--$500 million 2.35% senior debt due 2020 'A-';
--$500 million 4.80% senior notes due 2021 'A-';
--$250 million 4.05% senior debt due 2023 'A-';
--$600 million 3.50% senior notes due 2024 'A-';
--$500 million 3.50% senior debt due 2025 'A-';
--$600 million 3.75% senior debt due 2026 'A-';
--$300 million 5.875% senior debt due 2033 'A-'.

The Rating Outlook is Stable.