A.M. Best Assigns Debt Rating to The Progressive Corporation's Junior Subordinated Debentures.OLDWICK, N.J. -- A.M. Best Co. has assigned a debt rating of "bbb+" to The Progressive Corporation's (Progressive) (Mayfield Village, OH) [NYSE NYSE See: New York Stock Exchange :PGR PGR Project Gotham Racing (game) PGR Procuraduría General de la República (Mexico) PGR Patriot Guard Riders (national motorcycle group based in Centennial, CO) ] $1.0 billion offering of junior subordinated debentures. The junior subordinated debentures are fixed-to-floating rate and have a scheduled maturity of 30 years with a final maturity of 60 years. The rating outlook is positive. All other ratings for Progressive remain unchanged. Proceeds from this offering are expected to partially fund Progressive's special dividend and share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program announced on June 14, 2007. Although financial leverage will moderately increase in the near term following the special dividend and share repurchase program, debt-to-adjusted capitalization remains within A.M. Best's expectations. The rating reflects Progressive's strong operating performance and competitive advantages, which provide excellent cash flow to fund fixed charges and interest payments. In addition, The Progressive Investment Company Inc., a non-insurance investment affiliate, maintains a substantial amount of liquid assets Cash, or property immediately convertible to cash, such as Securities, notes, life insurance policies with cash surrender values, U.S. savings bonds, or an account receivable. that provide a source of funds for capital allocation, interest payments and debt obligations. The positive outlook was assigned on December 6, 2006 and is based on Progressive's strong financial position, consistent operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. earnings and disciplined capital management strategies. For Best's Debt Ratings, all other Best's Ratings, an overview of the rating process and rating methodologies, please visit www.ambest.com/ratings. Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industries, including the banking and insurance sectors. For more information, visit www.ambest.com. |
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