Fitch Affirms Lazard Group LLC's IDR at 'BBB-'; Outlook Stable

NEW YORK--(Business Wire)--
Fitch Ratings has affirmed the following ratings on Lazard Group LLC:

Lazard Group LLC

--Long-term Issuer Default Rating (IDR) at 'BBB-';

--Senior debt rating at 'BBB-'.

The Rating Outlook is Stable.

Lazard's ratings are based on its strong franchise in the merger advisory and
restructuring space and improving financial leverage. Independence from debt and
equity underwriting and distribution and the company's cadre of experienced
senior bankers are key competitive advantages. Despite declines in mergers and
acquisitions (M&A) transaction volume, the firm was able to strategically
redeploy resources from its M&A teams to its busier restructuring group.

The Rating Outlook is Stable. The firm's restructuring practice has been a key
strength, particularly in 2008, and a source of revenue stability. Lazard's
ratings incorporate recent earnings variability, and the firm has proven to
maintain a stable franchise. As expected, global M&A transaction volumes
contracted in 2008 and reduced earnings. Given the prospects of challenging
market conditions, uplift in the rating is unlikely in the near-term. However,
sustained demonstration of good financial performance and improvement through
this down cycle and improvements in cash flow coverage could create positive
rating momentum over the longer term.

Lazard's restructuring business has helped offset the decline in revenue as M&A
volumes declined, though not yet fully realized through 2008. Lazard remains
exposed to the revenue volatility and competition from its investment banking
business, which is a key driver of its earnings. The heightened relevance of an
independent advisory firm and market events reduces previous concerns with
employee retention. While asset management remains a core business and should
further diversify revenues in the future, the firm experienced weaker
performance and declines in assets under management (AUM) in 2008, largely a
result of significant asset value depreciation in the wake of challenging global
market conditions.

Leverage and cash flow coverage ratios improved through debt reduction. In May
2008, the firm's $438 million in senior notes underlying the Equity Security
Units (ESUs) were successfully remarketed and then subsequently retired. At the
same time, Lazard increased its equity through issuance of 14.6 million shares
to settle the equity purchase contracts which were part of the ESUs.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings
Joo-Yung Lee, 212-908-0560, New York
Eileen Fahey, 312-368-5468, Chicago
or
Media Relations:
Sandro Scenga, 212-908-0278, New York
Email: sandro.scenga@fitchratings.com

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