We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Progressive (PGR) Prices Senior Notes Worth $850 Million
Read MoreHide Full Article
The Progressive Corporation (PGR - Free Report) recently priced 4.125% $850 million senior notes, with maturity scheduled on Apr 3, 2047. The notes will be issued at 99.879% of face value.
The company plans to deploy the net proceeds of the offering to redeem or repay its 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures, which are expected to mature in 2067. Out of this, $563.7 million in principal amount are currently outstanding. The company can redeem the debentures on or after Jun 15, 2017, at a price equal to 100% of the principal amount plus accrued and unpaid interest to the redemption date. The remaining proceeds, if any, will be used for generate corporate purposes.
Progressive displays its prudence by issuing debentures amid a low interest rate environment. Though the Fed has recently raised rates – two consecutive hikes in the last two quarters, given the still low interest rate environment – the company is consciously making efforts to reduce its interest burden on borrowings. In turn, these efforts will facilitate margin expansion.
The Zacks Rank #1 (Strong Buy) property and casualty (P&C) insurer’s solid liquidity position, excellent financial strength and operational strength should enable it to service debt uninterruptedly, maintaining its creditworthiness.
Though the company could lower its interest burden, its debt capital ratio will deteriorate after the new issuance.
Concurrently, Moody’s Investor Service, an affiliate of Moody’s Corporation (MCO - Free Report) assigned A2 rating with stable outlook to the recent issued senior notes.
Shares of Progressive gained 10.62% year to date, significantly outperforming the Zacks categorized Property and Casualty industry’s increase of 2.55%. We believe that the company’s solid operational performance, strategic initiatives as well as robust capital and liquidity position will continue to drive the stock higher in the future.
Stocks to Consider
Investors interested in other stocks from the same space can consider American Financial Group, Inc. (AFG - Free Report) and Argo Group International Holdings, Ltd. . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Financial offers P&C insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 6.45%.
Argo Group International Holdings underwrites specialty insurance and reinsurance products in the P&C market worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 36.54%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Progressive (PGR) Prices Senior Notes Worth $850 Million
The Progressive Corporation (PGR - Free Report) recently priced 4.125% $850 million senior notes, with maturity scheduled on Apr 3, 2047. The notes will be issued at 99.879% of face value.
The company plans to deploy the net proceeds of the offering to redeem or repay its 6.70% Fixed-to-Floating Rate Junior Subordinated Debentures, which are expected to mature in 2067. Out of this, $563.7 million in principal amount are currently outstanding. The company can redeem the debentures on or after Jun 15, 2017, at a price equal to 100% of the principal amount plus accrued and unpaid interest to the redemption date. The remaining proceeds, if any, will be used for generate corporate purposes.
Progressive displays its prudence by issuing debentures amid a low interest rate environment. Though the Fed has recently raised rates – two consecutive hikes in the last two quarters, given the still low interest rate environment – the company is consciously making efforts to reduce its interest burden on borrowings. In turn, these efforts will facilitate margin expansion.
The Zacks Rank #1 (Strong Buy) property and casualty (P&C) insurer’s solid liquidity position, excellent financial strength and operational strength should enable it to service debt uninterruptedly, maintaining its creditworthiness.
Though the company could lower its interest burden, its debt capital ratio will deteriorate after the new issuance.
Concurrently, Moody’s Investor Service, an affiliate of Moody’s Corporation (MCO - Free Report) assigned A2 rating with stable outlook to the recent issued senior notes.
Shares of Progressive gained 10.62% year to date, significantly outperforming the Zacks categorized Property and Casualty industry’s increase of 2.55%. We believe that the company’s solid operational performance, strategic initiatives as well as robust capital and liquidity position will continue to drive the stock higher in the future.
Stocks to Consider
Investors interested in other stocks from the same space can consider American Financial Group, Inc. (AFG - Free Report) and Argo Group International Holdings, Ltd. . Both the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
American Financial offers P&C insurance products in the United States. The company delivered positive surprises in three of the last four quarters with an average beat of 6.45%.
Argo Group International Holdings underwrites specialty insurance and reinsurance products in the P&C market worldwide. The company delivered positive surprises in all of the last four quarters with an average beat of 36.54%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>