STATE AUTO FINANCIAL CORP FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits - Insurance News | InsuranceNewsNet

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July 30, 2013 Newswires
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STATE AUTO FINANCIAL CORP FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Termination of a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits

Edgar Online, Inc.

Item 1.01 Entry into a Material Definitive Agreement.

On July 26, 2013, State Auto Property & Casualty Insurance Company (the "Company" or "State Auto P&C"), a wholly owned insurance subsidiary of State Auto Financial Corporation ("State Auto Financial"), entered into a Credit Agreement (the "New Credit Agreement") as borrower with a syndicate of financial institutions, as lenders party thereto, KeyBank National Association, as Administrative Agent, Lead Arranger, Sole Book Runner and Swingline Lender, and JPMorgan Chase Bank, N.A. and PNC Bank, National Association, as Co-Documentation Agents. The New Credit Agreement provides State Auto P&C with a $100.0 million five-year revolving credit facility (the "New Credit Facility"). During the term of the New Credit Facility, State Auto P&C has the right to increase the total facility amount by up to $50.0 million, provided that no event of default has occurred and is continuing. The New Credit Facility is available for general corporate purposes, including working capital, acquisitions and liquidity purposes. The New Credit Facility provides for interest-only payments during its term, with principal due in full at maturity. Interest is based on either the London interbank offered rate or a base rate plus a calculated margin amount. All advances under the New Credit Agreement are to be fully secured by a pledge of specific investment securities of the Company. State Auto P&C's New Credit Facility replaced State Auto Financial's existing $100.0 million revolving credit facility, which was terminated. See Item 1.02 below.

The New Credit Agreement contains certain covenants, including financial covenants that require State Auto Financial to (i) maintain a minimum net worth and (ii) not exceed a certain debt to capitalization ratio.

Item 1.02 Termination of a Material Definitive Agreement.

In connection with State Auto P&C's entering into the New Credit Agreement, State Auto Financial terminated its Credit Agreement dated September 29, 2011 (the "Old Credit Agreement"). The Old Credit Agreement provided State Auto Financial with a $100.0 million five-year unsecured revolving credit facility.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an

Off-Balance Sheet Arrangement of a Registrant.

Information concerning State Auto P&C's new Credit Agreement is set forth in Item 1.01, which information is incorporated herein by reference.

                                       2  --------------------------------------------------------------------------------

Item 9.01. Financial Statements and Exhibits.

  (c) Exhibits.    Exhibit No.                                  Description  10.1              Credit Agreement dated as of July 26, 2013, among State Auto                   Property & Casualty, as borrower and a syndicate of financial                   institutions, as the lenders party thereto, KeyBank National                   Association, as Administrative Agent, Lead Arranger, Sole Book                   Runner and Swingline Lender, and JPMorgan Chase Bank, N.A. and                   PNC Bank, National Association, as Co-Documentation Agents.
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