The ratings of Aon Corp. and its subsidiaries were put on CreditWatch with negative implications by Standard & Poor’s (S&P) on April 20.
The rating action came subsequent to Aon’s announcement that it would be spinning off its underwriting businesses to existing shareholders. Companies affected by the proposed spin-off include Combined Insurance Co. of America, Combined Life Insurance Co. of NY, Virginia Surety Co. Inc., London General Insurance Co. Ltd. and Aon Warranty Group Inc.
S&P expressed concerns that note holders of Aon paper will lose the benefits of diversification and capital support afforded by Aon’s ownership of the insurance operations.
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