Fitch Ratings has assigned an ‘A’ rating to The Progressive Corporation (Progressive)(NYSE:PGR) $1 billion 6.70% junior subordinated debentures. Fitch has taken no rating action on the ‘AA-‘ Issuer Default Rating (IDR) and ‘A+’ senior debt ratings of Progressive and the ‘AA+’ Insurer Financial Strength (IFS) rating of Progressive’s operating subsidiaries. Refer to the rating list below for all ratings. The Rating Outlook is Stable.
Progressive’s junior subordinated debt offering receives 75% equity credit based on Fitch’s hybrid methodology. The primary factors used to determine equity credit included: loss absorption provided by the junior subordinated standing of the securities, the ability to defer dividends for up to ten years and the fact that the step up provision from fixed to floating after ten years was not considered onerous.
Proforma debt to equity and coverage for 2007 are 19.7% and 17.4 times (x) respectively. Both measures are comfortably in Fitch’s expectations for the current rating category.
The Progressive Corporation is an insurance holding company based in Mayfield Village, OH. The company sells personal and commercial automobile insurance through independent agent and direct distribution channels.
Fitch has taken no rating action on the ‘AA+’ IFS Rating with a Stable Outlook for the following companies:
The following are members of Progressive Direct Holdings:
Drive New Jersey Insurance Co
Progressive American Insurance Co
Progressive Bayside Insurance Co
Progressive Casualty Insurance Co
Progressive Classic Insurance Co
Progressive Gulf Insurance Co
Progressive Hawaii Insurance Corp
Progressive Mountain Insurance Co
Progressive Northern Insurance Co
Progressive Northwestern Insurance Co
Progressive Preferred Insurance Co
Progressive Southeastern Insurance Co
Progressive Specialty Insurance Co
Progressive Michigan Insurance Co
Progressive Northeastern Insurance Co
Progressive Security Insurance Co
Progressive West Insurance Co
Progressive County Mutual Insurance Co
The following are members of Drive Insurance Holdings:
Mountain Laurel Assurance Co
Progressive Direct Insurance Co
Progressive Paloverde Insurance Co
Progressive Premier Insurance Co of IL
Progressive Universal Insurance Co
Progressive Home Insurance Co
Progressive MAX Insurance CO
Progressive Marathon Insurance Co
Progressive Auto Pro Insurance Co
Progressive Choice Insurance Co
Progressive Freedom Insurance Co
Progressive Garden State Insurance Co
The following are members of Progressive Commercial Holdings:
Artisan & Truckers Cas Co
Progressive Express Insurance Co
United Financial Casualty Co
Fitch has taken no action on the ‘AA-‘ Issuer Default Rating and ‘A+’ senior debt rating both with a Stable Outlook to:
The Progressive Corporation
–$347.7 million 6.375% due Jan. 15, 2012 affirmed at ‘A+’;
–$148.9 million 7% due Oct. 1, 2013 affirmed at ‘A+’;
–$294.1 million 6.625% due March 31, 2029 affirmed at ‘A+’;
–$393.7 million 6.25% due Dec. 1, 2032 affirmed at ‘A+’.
Fitch has assigned an ‘A’ rating to Progressive Corporations Junior Subordinate Debentures:
The Progressive Corporation
— $1 billion 6.70% due June 2067
Fitch’s rating definitions and the terms of use of such ratings are available on the agency’s public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch’s code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the ‘Code of Conduct’ section of this site.