Fitch Ratings removes from Rating Watch Positive and upgrades the ratings for Willis Towers Watson PLC (WLTW) (formerly Willis Group Holdings), including the Issuer Default Ratings (IDRs) for Willis, Willis North America Inc., and Trinity Acquisition plc, and all senior unsecured notes to 'BBB' from 'BBB-'. The Rating Outlook is Stable.

A full list of ratings follows at the end of this release.

KEY RATING DRIVERS

Today's action follows yesterday's announcement that the merger of Willis Group Holdings and Towers Watson & Co. (TW) was completed.

The merger creates a larger, more diverse entity with operating franchises in several non-capital-intensive fee and commission-based businesses including: insurance brokerage, and consulting services in employee benefits, human resources and risk and capital management. The transaction also creates opportunities to leverage existing TW relationships to increase penetration in the larger U.S. P/C corporate market and to expand TW's international profile.

Driving the upgrade was relatively low debt utilization at TW which fosters considerably lower pro forma financial leverage for the combined WLTW entity relative to Willis debt/EBITDA of 3.3x at Sept. 30, 2015. Fitch estimates that debt/EBITDA is currently about 2.3x and unlikely to materially increase in the near term.

Lower leverage, coupled with the inherent profitability of the merged entity is also expected to boost interest coverage to low double-digits; a meaningful increase compared with Willis reported EBITDA/interest expense of 5.6x for the trailing 12 months ending Sept. 30, 2015.

Key challenges and sources of uncertainty include: integration of corporate and systems function, realization of anticipated expense savings, and retaining key employee and clients going forward.

WLTW's ratings continue to reflect the company's strong liquidity profile with good cash flow generation and increasing financial flexibility, favorable competitive position as one of the top three global insurance brokers, positive organic growth and an operating EBIT margin of 15.8% at Sept. 30, 2015, which remains in line with the company's closest peers.

RATING SENSITIVITIES

Key rating triggers that could result in a downgrade include a material near-term change in financial profile or operating performance of the combined company, a failure to maintain EBITDA-to-interest ratios of 7x or higher, an increase in financial leverage evidenced by debt/EBITDA above 2.5x, or a material goodwill impairment that cast doubt on the new entities' ability to generate future earnings and cash flows.

Key rating triggers that could result in an upgrade include realization and demonstration of the benefits of the TW and Gras Savoye mergers with continued improved margins and ultimate improvement in the debt-to-EBITDA ratio and EBITDA-to-interest ratios in line with higher rated peers.

FULL LIST OF RATING ACTIONS

Fitch removes from Rating Watch Positive and upgrades the following:

Willis Towers Watson PLC (formerly Willis Group Holdings)
--IDR to 'BBB' from 'BBB-';
--4.125% senior unsecured notes due 2016 to 'BBB' from 'BBB-';
--5.75% senior unsecured notes due 2021 to 'BBB' from 'BBB-'.

Willis North America Inc.
--IDR to 'BBB' from 'BBB-';
--6.2% senior unsecured notes due 2017 to 'BBB' from 'BBB-';
--7.00% senior notes due 2019 to 'BBB' from 'BBB-'.

Trinity Acquisition plc
--IDR to 'BBB' from 'BBB-';
--4.625% senior unsecured notes due Aug. 15, 2023 to 'BBB' from 'BBB-';
--6.125% senior unsecured notes due Aug. 15, 2043 to 'BBB' from 'BBB-'.

The Rating Outlook is Stable.

Additional information is available on www.fitchratings.com

Applicable Criteria
Corporate Rating Methodology - Including Short-Term Ratings and Parent and Subsidiary Linkage (pub. 17 Aug 2015)
https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=869362

Additional Disclosures
Dodd-Frank Rating Information Disclosure Form
https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=997549
Solicitation Status
https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=997549
Endorsement Policy
https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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