8-KMaterial AgreementsExhibits & Filings

PROGRESSIVE CORP/OH/ 8-K Report, Material Agreement (Jan 4, 2012)

Filed January 4, 2012For Securities:PGR

Summary

This 8-K filing by The Progressive Corporation (PGR) announces the amendment and extension of its 364-Day Secured Liquidity Credit Facility with PNC Bank, National Association. The primary purpose of this facility is to provide Progressive with access to funds during periods of financial market disruption or operational disruptions in its treasury or cash management systems. The amendment extends the facility's term by one year, from December 31, 2011, to December 31, 2012. This extension ensures continued financial flexibility for Progressive, allowing it to draw upon the line of credit if necessary. Importantly, the company has not utilized this credit facility since its inception in 2008, indicating strong existing liquidity. The amendment involves a modest one-time facility fee of $25,000, while other material terms of the credit agreement remain consistent.

Key Highlights

  • 1Progressive Corporation amended its 364-Day Secured Liquidity Credit Facility with PNC Bank.
  • 2The amendment extends the credit facility's term by one year, to December 31, 2012.
  • 3The facility provides Progressive with a line of credit up to $125 million, potentially increasing to $150 million.
  • 4The credit line is secured by certain company assets.
  • 5The facility is intended to provide liquidity during financial market or operational disruptions.
  • 6Progressive has not borrowed against this facility since its inception in December 2008.
  • 7A one-time facility fee of $25,000 was paid for the extension.

Frequently Asked Questions

The primary purpose of the 364-Day Secured Liquidity Credit Facility is to provide The Progressive Corporation with access to funds during potential disruptions to its normal cash management or treasury operations, or during broader disruptions in financial markets.

No, The Progressive Corporation has not made any borrowings on this line of credit since its inception on December 31, 2008. This suggests the company has ample liquidity and uses the facility primarily as a safeguard.

The main change is the extension of the credit facility's term by one year, from December 31, 2011, to December 31, 2012. The company also paid a one-time facility fee of $25,000. Other material terms remain unchanged.

The line of credit has a principal amount of $125 million. Progressive can request to increase this amount up to a maximum of $150 million, subject to PNC Bank's discretion.