| Item 1.01. | Entry into a Material Definitive Agreement. |
On October 19, 2023, Aon plc (“Parent”), Aon Corporation (“Aon US”), Aon Global Holdings plc (“AGH”), Aon Global Limited (“AGL”) and Aon North America, Inc. (“ANA”) entered into a Credit Agreement (the “Revolving Credit Agreement”) with Citibank, N.A. (“Citibank”), as administrative agent, the lenders party thereto (collectively, the “Revolving Lenders”), Morgan Stanley Senior Funding, Inc. and HSBC Bank USA, National Association, as syndication agents, and Citibank, Morgan Stanley Senior Funding, Inc. and HSBC Securities (USA) Inc., as joint lead arrangers and joint bookrunners, pursuant to which, subject to the conditions set forth in the Revolving Credit Agreement, the Revolving Lenders committed to provide a $1,000,000,000 unsecured revolving credit facility. The Revolving Credit Agreement replaces the $750,000,000 revolving credit facility of Parent, Aon US, AGH, and AGL dated as of October 19, 2017, which was scheduled to mature on October 19, 2024.
Borrowings under the Revolving Credit Agreement may be made by Parent, Aon US, AGH, AGL or any other subsidiary designated as a borrower in U.S. dollars, pounds sterling or euros. Borrowings (i) in U.S. dollars will bear interest, at the borrower’s option, at an adjusted term SOFR rate or an alternate base rate, in each case, plus an applicable margin, (ii) in euros will bear interest at the eurocurrency rate plus an applicable margin and (iii) in pounds sterling will bear interest at SONIA plus an applicable margin, in each case, as set forth in the Revolving Credit Agreement. A facility fee owed on the aggregate commitments under the Revolving Credit Agreement is also based on the public debt rating of Parent’s long-term senior unsecured debt and may change in connection with a change to Parent’s debt ratings.
The Revolving Credit Agreement has a maturity date of October 19, 2028, subject to optional one-year extensions, and contains covenants with respect to the ratio of consolidated adjusted EBITDA to consolidated interest expense (which may not be less than 4.0 to 1.0) and the ratio of consolidated funded debt to consolidated adjusted EBITDA (which may not be more than 3.25 to 1.00, subject to certain exceptions), as well as other customary covenants, undertakings and events of default.
Parent and its subsidiaries have other commercial relationships with the Revolving Lenders, lead arrangers and syndication agents or their affiliates. In addition, Parent and certain of its affiliates have performed, and may perform, various insurance brokerage and consulting services for the Revolving Lenders, lead arrangers and syndication agents or their affiliates.
The foregoing summary is qualified in its entirety by reference to the Revolving Credit Agreement, a copy of which is filed herewith as Exhibit 10.1 and incorporated herein by reference.
Also on October 19, 2023, Parent, Aon US, Aon UK Limited (“AUKL”), AGH, AGL, ANA, Citibank, in its capacity as administrative agent, and the other parties thereto entered into Amendment No. 2 to the Credit Agreement (the “Amendment”) with respect to the Credit Agreement, dated September 28, 2021 (as amended by that certain Amendment No. 1 to the Credit Agreement, dated as of May 3, 2023, and as further amended, supplemented or otherwise modified through the date hereof, including pursuant to the Amendment, the “2021 Revolving Credit Agreement”).
The Amendment amends the 2021 Revolving Credit Agreement to, among other things, (i) extend the Facility Termination Date (as defined in the 2021 Revolving Credit Agreement) from September 28, 2026 to September 28, 2027, (ii) modify pricing in the manner set forth in the Amendment and (iii) make certain other conforming changes to align with the terms of the Revolving Credit Agreement.
Parent and its subsidiaries have other commercial relationships with the 2021 Revolving Credit Agreement lenders, lead arrangers and bookrunners, the syndication agent and their respective affiliates. In addition, Parent and certain of its affiliates have performed, and may perform, various insurance brokerage and consulting services for the 2021 Revolving Credit Agreement lenders, lead arrangers and bookrunners, the syndication agent and/or their respective affiliates.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed herewith as Exhibit 10.2 and incorporated herein by reference.
