TEXT-S&P puts USI Holdings 'B-' rating on watch developing

Mon Nov 26, 2012 1:48pm EST

Overview
     -- USI Holdings Corp. (USI) has announced that it has reached a 
definitive agreement with Onex Corp. in a $2.3 billion transaction that will 
give the private equity firm a majority stake in the company.
     -- As a result, we are affirming and placing all our ratings, including 
the 'B-' counterparty credit rating, on USI on CreditWatch with developing 
implications.
     -- We will resolve the Credit Watch listing within the next 30 days once 
we receive more information regarding the impact of the transaction on USI.

Rating Action
On Nov. 26, 2012, Standard & Poor's Ratings Services affirmed and placed its 
'B-' counterparty credit rating and all issue-level ratings on USI Holdings 
Corp. (USI) on CreditWatch with developing implications.

Rationale
The CreditWatch placement follows USI's announcement that it has reached a 
definitive agreement to be acquired by private equity firm Onex Corp. 
(unrated) in a $2.3 billion transaction. The deal will give the private equity 
firm a majority stake in USI; other terms of the transaction were not 
disclosed. Onex has about $14 billion in assets under management. The current 
majority owner of USI is GS Capital Partners L.P., an investor in the company 
since 2007. The CreditWatch placement reflects our limited information 
regarding the details of the transaction at this time and our resultant 
uncertainty regarding the transaction's effect on USI's capital structure, 
cash flows, and credit protection measures.

CreditWatch
Over the next couple of weeks, we expect to meet with USI's management team to 
discuss details of the acquisition by Onex. We expect to resolve the 
CreditWatch listing over the next 30 days following these discussions. 
Potential outcomes of the CreditWatch could be an affirmation, an upgrade by 
one notch or more, or a downgrade by one notch or more. The outcome will 
primarily depend on our analysis of the effect of the transaction on USI's 
capital structure, cash flows, and credit protection measures.

Related Criteria And Research
U.S. Insurance Broker Criteria, April 22, 2008

Ratings List
Ratings Affirmed; CreditWatch Action
                                        To                 From
USI Holdings Corp.
 Counterparty Credit Rating
  Local Currency                        B-/Watch Dev/--    B-/Positive/--

Ratings Affirmed; CreditWatch Action; Recovery Ratings Remain Unchanged
                                        To                 From
USI Holdings Corp.
 Senior Secured                         B/Watch Dev        B
   Recovery Rating                      2                  2
 Senior Unsecured
  Local Currency                        CCC/Watch Dev      CCC
   Recovery Rating                      6                  6
 Subordinated
  Local Currency                        CCC/Watch Dev      CCC
   Recovery Rating                      6                  6


 
Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.