Marsh & MacLennan Plans Immediate Lender Talks

Marsh & McLennan Companies (MMC) plans to commence immediate discussions with its lenders to amend or replace its $2.755 billion credit facilities as Eliott Spitzer continues his assault of the company over brokerage fees. According to a Securities and Exchange Commission filing, the matters raised by the civil complaint may prohibit MMC from borrowing under the facilities, which contain standard representations as to no material adverse litigation and compliance with laws.

 

The required lenders under the facilities have agreed to waive this until Dec. 30, and in exchange MMC has agreed that the facilities will be used exclusively to support CP borrowings. In order for MMC to borrow under the facilities, the face amount of CP outstanding cannot exceed $1.9 billion. MMC has also agreed not to repurchase its stock and not to permit any of its subsidiaries to incur debt other than under existing facilities.

 

MMC maintains four revolving facilities. A $700 million facility that expires in June 2005; a $355 million revolver that expires in July 2005; a $1 billion revolver expiring in June 2007 and a $700 million expiring in June 2009. The facilities support MMC’s commercial paper program and are currently undrawn. Lead agents on the facilities include Citigroup and J.P. Morgan. Spokespeople for the banks declined comment. An MMC spokeswoman did not return calls.