Moody's: Progressive notes A1

Moody's Investors Service said it assigned an A1 rating to the $500 million in senior unsecured notes to be issued by Progressive Corp.

The proceeds will be used for general corporate purposes, including the pre-funding of $350 million in debt maturing in January 2012.

The outlook is stable.

The company's Aa2 insurance financial strength and A1 senior debt ratings reflect the group's leadership position in the personal automobile market, along with its strong commitment to profitability and efficiency in its core business, Moody's said, along with its strong liquidity and strong risk adjusted capitalization.

These strengths are offset by the company's single line product concentration in personal automobile insurance, which exposes it to greater competitive and regulatory risk, the agency said.

Moody's said it considers the senior debt issuance to be largely neutral from a credit standpoint as it will result in only a modest increase in financial leverage.

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