However, that outlook was not entirely shared by the Moody's Investors Service rating agency, which said today it is still eyeing the firm for a possible downgrade of its debt rating. Moody's also said it had concerns about continuing investigations of MMC.

Barbara Perlmutter, spokeswoman for MMC, told National Underwriter that the firm's recently appointed chief executive, Michael Cherkasky, is "hopeful that we will be able to have a settlement before the year is over." Ms. Perlmutter said he is currently working toward reaching a settlement before 2005.

Mr. Cherkasky took over as CEO at MMC after Mr. Spitzer filed a state anti-trust action seeking punitive damages against the company for bid-rigging. He said when the suit was announced that he could not settle it with the current management in place. A few weeks later, Mr. Cherkasky's predecessor Jeffrey Greenberg resigned.

"We have been cooperating with the attorney general's office from the very beginning," said Ms. Perlmutter, adding that Mr. Cherkasky is optimistic that there will be a settlement soon.

Ms. Perlmutter declined to say how much the settlement might be to the company and its shareholders. Last month, Mr. Spitzer's spokesman, Darren Dopp, said a settlement may cost Marsh more than $500 million.

The suit that Mr. Spitzer announced in October alleges that MMC's insurance brokerage division, Marsh, used bid-rigging and other methods to inflate the cost of insurance contract placements in return for profitable market service agreements, paid by big insurers who were part of a price-fixing scheme.

MMC announced earlier this month that it is setting aside $232 million toward a settlement of the suit.

In an 8-K filing with the Securities and Exchange Commission, MMC said it has reached an agreement with its lenders on a new $1 billion loan agreement and amended its existing $1.7 billion loan facility.

The new $1 billion loan agreement will come due Dec. 31, 2007. The $1.7 billion amended loan agreement, which was due to expire in 2005, extends $1 billion of it to June 13, 2007 and the remaining $700 million to June 9, 2009.

The agreements were worked out between Citibank, Bank of America, and Deutsche Bank AG New York Branch.

MMC expects the closing of the agreements by mid-December.

Moody's said these term loan facilities contain provisions that are favorable to the arranging banks vis a vis the existing senior unsecured creditors.

The term loan facilities will be unconditionally guaranteed by MMC's principal operating subsidiaries: Marsh Inc., Putnam Investments Trust and Mercer Inc., Moody's noted.

Moody's commented that the $1 billion term loan facility contains mandatory prepayments which state that MMC shall repay the term facility with 75 percent of the net proceeds from certain debt issuances and asset sales that exceed minimum individual and aggregate amounts.

Moody's said it believes these features create a distinction between the credit quality of the term loan facilities and the senior notes because they effectively subordinate the current holders of senior unsecured bonds.

In the continuing review for possible downgrade, Moody's cited as key concerns, uncertainty over the magnitude and timing of likely fines, restitution and settlements.

Mentioned as well was uncertainty over the company's dividend policy and possible adverse effects of new revelations arising from ongoing investigations or legal actions.

Moody's said the ratings would likely be lowered in the event that fines or settlements exceed $1 billion, the company does not prudently manage its dividend policy in light of recent developments, or there are new material legal actions.