Debt

9 Months Ended

Sep. 30, 2011

Debt

Debt

9.  Debt

At September 30, 2011, the Company had $100 million in commercial paper outstanding as compared to no commercial paper outstanding at September 30, 2010. The Company utilizes the proceeds from the commercial paper market from time to time in order to meet short term working capital needs.

On May 24, 2011 Aon entered into an underwriting agreement for the sale of $500 million of 3.125% unsecured Senior Notes due 2016 (the “Notes”).  On June 15, 2011, Aon entered into a Term Credit Agreement for unsecured term loan financing of $450 million (“2011 Term Loan Facility”) due on October 1, 2013.  The 2011 Term Loan Facility is a variable rate loan that is based on LIBOR plus a margin and at September 30, 2011, the effective annualized rate was approximately 1.56%.  The Company used the net proceeds from the Notes issuance and 2011 Term Loan Facility borrowings to repay all amounts outstanding under its $1.0 billion three-year credit agreement dated August 13, 2010 (“2010 Term Loan Facility”), which was entered into in connection with the acquisition of Hewitt.  The Company recorded a $19 million loss on the extinguishment of the 2010 Term Loan Facility as a result of the write-off of the related deferred financing costs, which is included in Other income (expense) in the Condensed Consolidated Statements of Income.

On March 8, 2011, an indirect wholly-owned subsidiary of Aon issued CAD 375 million ($363 million at September 30, 2011 exchange rates) of 4.76% senior unsecured debt securities, which are due in March 2018 and are guaranteed by the Company.  The Company used the net proceeds from this issuance to repay its CAD 375 million 5.05% debt securities upon their maturity on April 12, 2011.