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TEXT-Fitch rates Affiliated Managers Group retail notes 'BBB-'
August 8, 2012 / 8:10 PM / 5 years ago

TEXT-Fitch rates Affiliated Managers Group retail notes 'BBB-'

Aug 8 - Fitch Ratings has assigned a 'BBB-' rating to Affiliated Managers
Group Inc.'s (AMG) $200 million of senior unsecured retail notes. The
notes have a coupon of 6.375% and will mature on Aug. 15, 2042.

The notes will be callable, in whole or part, at any time on or after Aug. 15,
2017 at the issuer's option. The notes will rank equally with AMG's other
unsecured debt outstanding. Proceeds from the issuance will be used to repay
borrowings under AMG's unsecured revolving credit facility, and for general
corporate purposes. As of June 30, 2012, AMG had $195 million outstanding under
its revolving credit facility.

Leverage, measured as gross debt to trailing twelve months (TTM) adjusted
EBITDA, increases moderately to 2.35x at 2Q'12, up from 2.08x at TTM 1Q'12, as
AMG borrowed $195 million on its bank revolver to fund the acquisition of equity
interests in Yacktman Asset Management Co. and Veritable, LP., in 2Q'12. Fitch
calculates AMG's leverage, giving credit for LTM earnings from the recent
acquisitions. Interest coverage, measured as TTM adjusted EBITDA to interest
expense, was 6.76x at 2Q12, a slight decline from 7.09x at TTM 1Q'12. Both
ratios are solidly in line with AMG's current ratings.

Fitch notes that leverage tends to increase following a large acquisition, but
declines as the integration is completed and the cash flows are used to reduce
debt levels.

Given that a portion of the proceeds from the new issuance will be used to repay
outstanding borrowings under the revolving credit facility, Fitch does not
envision there being a material impact on the company's leverage levels as a
result of the issuance.

AMG's ratings reflects its growing scale in the asset management space, solid
investment performance by its affiliates, strong cash flow generation, and
adequate leverage and interest coverage ratios. Ratings also factor in the
company's inherent exposure to volatility in broader financial markets.

Improvement in current leverage and interest coverage metrics and consistent
operating and investment performance could lead to positive rating action.
Conversely, aggressive acquisitions funded by increased debt levels, material
deterioration in leverage or interest coverage ratios, sustained investment
underperformance at major affiliates, significant increase in equity puts by
affiliates leading to liquidity issues, and/or unexpected operational losses or
significant net outflows, could lead to negative rating action.

Fitch currently rates AMG as follows:

Affiliated Managers Group Inc.
--Long-term Issuer Default Rating (IDR) 'BBB-';
--Senior bank credit facility 'BBB-';
--Senior convertible notes 'BBB-'.

AMG Capital Trust I
AMG Capital Trust II
--Trust preferred securities 'BB-'.

The Rating Outlook is Stable.

Additional information is available at ''. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.

Applicable Criteria and Related Research:
--'Global Financial Institutions Rating Criteria' (Aug. 16, 2011);
--'Investment Manager and Alternative Funds Criteria' (Dec. 23, 2011).

Applicable Criteria and Related Research:
Global Financial Institutions Rating Criteria
Investment Manager and Alternative Funds Criteria

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