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Fitch Rates Affiliated Managers Group Inc.'s $125MM Senior Unsecured Retail Notes 'BBB-'

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has assigned a 'BBB-' rating to Affiliated Managers Group Inc.'s (AMG) $125 million senior unsecured retail notes. The notes have a coupon of 5.25% and will mature on Oct. 15, 2022.

The notes will be callable, in whole or part, at any time on or after Oct. 15, 2015 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. As of Sept. 28, 2012, AMG had $195 million outstanding under its revolving credit facility.

Given that 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.

Leverage, measured as gross debt to trailing 12 months adjusted EBITDA, was 2.35x at the second quarter of 2012.

RATING DRIVERS AND SENSITIVITIES

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-';

--Senior unsecured retail notes 'BBB-'.

AMG Capital Trust I

AMG Capital Trust II

--Trust preferred securities 'BB-'.

The Rating Outlook is Stable.

Additional information is available at 'www.fitchratings.com'. 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. 15, 2012);

--'Investment Manager and Alternative Funds Criteria' (Dec. 23, 2011).

Applicable Criteria and Related Research:

Global Financial Institutions Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=686181

Investment Manager and Alternative Funds Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=661367

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Fitch, Inc.
Primary Analyst
Mohak Rao, CFA, +1-212-908-0559
Director
One State Street Plaza
New York, NY 10004
or
Secondary Analyst
Paul Ryndak, +1-312-368-3194
Director
or
Committee Chairperson
Fabrice Toka, +1-212-908-0369
Senior Director
or
Media Relations
Brian Bertsch, +1-212-908-0549
brian.bertsch@fitchratings.com

Source: Fitch Ratings