Chicago-based Aon Corporation took a couple of giant steps toward its goal of raising $1 billion in new capital, with the successful sale of 32 million shares of stock at $17.18 per share it raised $550 million, $50 million more than it originally planned.
It also agreed to privately place $250 million aggregate principal amount of 3.5% convertible senior debentures due 2012. They will be convertible into Aon common stock “at a conversion ratio of 46.5658 shares per $1,000 principal amount of debentures (a conversion price of approximately $21.475 per common share),” said a company bulletin. Aon also said it has granted the initial purchasers of the debentures a 13-day option to purchase an additional $50 million. The placement of the debentures is expected to close on November 7, 2002.
Shares in the world’s second largest insurance broker were hit hard last week after a series of bad news. Aon suffered along with other insurers from the global decline in equity values. It announced that it was cutting its dividend, had shelved plans to sell or spin off its underwriting unit, because it couldn’t get the price it wanted, and needed an additional $1 billion to assure short term liquidity. Virtually all of the funds it’s raising will go to pay off or roll over short-term debt.
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