The first catastrophe bond of the quarter closed on opening day ... and it was a big one. State Farm's Merna Re II transaction was good for $350 million in risk capital, upsized from the earlier reported amount of $250 million. Though large, it doesn't compare to the previous Merna Re catastrophe bond, which set a record at $1.2 billion that remains to be beat.

Merna Re II was oversubscribed, but State Farm only wanted to place $350 million, Thomson Reuters reports (registration required). According to one investor who knew about the transaction, "The deal was oversubscribed at +365 basis points and after being upsized to $350 million." The investor added, "The initial price talk was 365 - 405 bp, but the deal got priced at 365 bp. However, Merna was a simple transaction and State Farm only wanted to place 350 million."

The nagging notion that Twitter is nothing more than a way for a kids to piss away their time was put to bed in 2009. It came together, especially, for Black Friday and the holiday shopping season that followed, but even when you look at the year as a whole, it's clear that major businesses jumped on the microblogging bandwagon readily. A new study by the Society for New Communications Research shows that Fortune 500 companies became addicted to communicating in 140-character blurbs last year.

Among the Fortune 500, 35% of companies had active Twitter accounts last year, which means that at least one tweet had been unleashed in the past 30 days. And, the use of Twitter is concentrated at the top: 47% of the Fortune 100 had active accounts last year. Only 22% of Fortune 500 companies had public-facing corporate blogs as of last year, but those that do see the value of integrated communications: more than 80% of these blogs were linked to a corporate Twitter account.

Insurance broker Aon (AON) reported a 2% increase in organic revenue in its EMEA region in the fourth quarter, due largely to its performance in emerging markets. The only country in the region where it said revenue fell was the UK. Overall revenue for the fourth quarter of last year increased 9% to $2.1 billion, though organic revenue dropped 2% worldwide. Revenue from insurance broking operations gained 8% (to $1.7 billion), representing a decline of 1%.

Currency trends led to an increase in operating expenses of 10% for Aon, which rose $162 million to $1.8 billion. Of this, $96 million came from currency-related issues. Restructuring expenses related to the Benfield acquisition were up $88 million to $175 million.

Aon (NYSE: AOC) thinks that risk brokerage and consulting has the best future, in terms of margins and growth.

To that end, the company announced Monday that it is selling off its underwriting businesses. Combined Insurance Company was sold for $2.4 billion to ACE Limited (NYSE: ACE), while Munich Re bought Aon's Sterling Life segment for $352 million.

Yes, even in the massive insurance business, this is a good chunk of change for Aon.

MAJOR PAPERS:

• Negotiations continued last night on a new labor agreement between Chrysler and the UAW, but it is unclear if an agreement will be reached by today's 11am deadline, reported the Wall Street Journal (subscription required).
• MGM Mirage (NYSE: MGM) is today expected to announce plans to build a $5B resort in Atlantic City, NJ that will be completed in 2012, reported the Wall Street Journal.
• The CEO of Swiss pharmaceutical company Roche Holding (OTC: RHHBY), Franz Humer, said he has no intention of increasing his company's $75 per share bid for U.S. diagnostics company Ventana Medical Systems (NASDAQ: VMSI), and is "very confident" that the offer will succeed, reported the Financial Times (subscription required).

OTHER PAPERS:

• Crain's Chicago Business reported that Aon Corporation (NYSE: AOC) has won back the insurance brokerage business of Sears Holdings Corporation (NASDAQ: SHLD).

WEBSITES:

• Harry Reid, the Senate Majority Leader, confirmed that there's little chance this year -- due to a crowded legislative calendar -- that there will be legislation to increase taxes on the private equity industry, reported TheDeal.com (subscription required).