Pro-Assurance 8-K 2013
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 8, 2013
(Exact name of registrant as specified in its charter)
Registrants telephone number, including area code: (205) 877-4400
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
On September 24, 2013, we announced that ProAssurance had been approved to be the majority capital provider for a new underwriting syndicate at Lloyds of London. On November 8, 2013, ProAssurance and its indirect wholly owned subsidiary, PRA Corporate Capital, Ltd., entered into agreements with Wells Fargo Bank, National Association, for a Standby Letter of Credit Facility in support of ProAssurances 2014 capital commitment to the Lloyds syndicate.
Under a Standby Letter of Credit Agreement, the Bank agreed to issue for the benefit of the Lloyds syndicate a standby letter of credit in the amount of £41,860,800 (approximately $67,000,000) for the account of PRA Corporate Capital, Ltd., which is the participant in the Lloyds syndicate. ProAssurance guaranteed the obligation of PRA Corporate Capital to reimburse the Bank for any funds advanced under the letter of credit.
ProAssurance may, at its election, secure its obligations under the guaranty in order to obtain more favorable pricing. Under the terms of a Pledge and Security Agreement, ProAssurance would be required to pledge cash and cash equivalents in an amount equal to 110% of the face amount of the letter of credit in order to obtain the more favorable pricing for the credit facility.
The Standby Letter of Credit Facility is in addition to the $150 million revolving credit facility made available to ProAssurance under the Credit Agreement dated as of April 15, 2011, among ProAssurance, U.S. Bank, National Association, in its capacities as administrative agent and as lead arranger and sole bookrunner, Wells Fargo Bank, National Association, as syndication agent, and the several lenders named therein (the Line of Credit Agreement). On November 8, 2013, ProAssurance and the lenders executed an amendment to the Line of Credit Agreement so that ProAssurance and its subsidiary would be able to enter into the above described agreements relating to the Standby Letter of Credit Agreement without violating the covenants set forth in the Line of Credit.
The following are filed as exhibits to this report:
[Signature on following page.]
Pursuant to the requirements of the Securities Exchange act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 13, 2013