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Investing.com -- Moody’s Ratings has affirmed Aon plc’s (NYSE:AON) Baa2 senior unsecured debt and Prime-2 commercial paper ratings while changing the outlook to positive from stable.
The rating agency cited Aon’s steady reduction in financial leverage since acquiring NFP Corp. in April 2024, along with its record of profitable growth and healthy free cash flow as reasons for the improved outlook.
Aon’s ratings reflect its position as the world’s second-largest insurance broker, its expertise in risk, health and wealth solutions, and its diversification across client types, products and regions. The company has consistently increased revenue and EBITDA through organic growth, strategic acquisitions and effective expense management.
Through the first nine months of 2025, Aon generated 6% organic revenue growth, with balanced performance across its business segments: Commercial Risk Solutions (6%), Reinsurance Solutions (5%), Health Solutions (6%) and Wealth Solutions (5%). Moody’s expects Aon to maintain mid-single digit organic revenue growth in the coming year.
The rating agency also projects Aon will maintain a debt-to-EBITDA ratio in the high 2s or low 3s, with (EBITDA - capex) interest coverage in the upper single digits and a free-cash-flow-to-debt ratio in the teens.
Factors that could lead to a rating upgrade include a debt-to-EBITDA ratio below 3.2x, (EBITDA - capex) coverage of interest above 7x, free-cash-flow-to-debt ratio in the teens or higher, and continued profitable growth.
Challenges noted in the credit assessment include Aon’s large debt burden, integration risk related to ongoing acquisitions, and its practice of periodically using debt proceeds to help fund substantial share buybacks. The company also faces potential liabilities from errors and omissions in delivering professional services.
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