Progressive gets consents to kill 6.25% notes replacement covenant

By Susanna Moon

Chicago, June 23 - Progressive Corp. said it received consents from holders of a majority of its 6.25% senior notes due 2032, which were needed to terminate the note's replacement capital covenant.

As a result, the company has executed a termination of the replacement capital covenant.

The replacement capital covenant for the 6.25% notes was granted to holders by Progressive in June 2007 in connection with Progressive's issue of the 6.7% debentures.

Holders tendered $222,907,000 of notes by the consent solicitation expiration at 5 p.m. ET on June 23. The offer began on June 10.

Those who delivered consents will receive a consent fee of $5.00 for each $1,000 principal amount of notes.

The company also previously launched a tender offer for up to $350 million of its $1 billion of 6.7% fixed-to-floating-rate junior subordinated debentures due 2067.

Those who tender their 6.7% debentures by the early tender time will get a total consideration of $950 per $1,000 principal amount of debentures, including a $50.00 early tender payment.

Those who tender after that time but prior to the expiration date of 11:59 p.m. ET on July 8 will not receive the early tender payment.

The solicitation was a condition of the tender offer. There is, however, no minimum tender threshold.

Deutsche Bank Securities Inc. is the solicitation agent and dealer manager (866 627-0391 or call collect 212 250-2955). Global Bondholder Services Corp. is the information agent (866 387-1500).

Progressive is a Mayfield Village, Ohio-based holding company. The Progressive Group of Insurance Cos. is an auto insurance group and seller of motorcycle and personal watercraft policies.

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