Moody's: Progressive notes A2

Moody's Investors Service said it assigned an A2 rating to $850 million of senior unsecured notes due April 3, 2047 issued by Progressive Corp.

The proceeds will be used from the offering to redeem the 6.70% fixed- to floating-rate junior subordinated debentures due 2067 and for general corporate purposes, Moody's said.

The outlook is stable.

The rating reflect the group's strong presence in the U.S. auto insurance market, superior underwriting and expense management, balanced distribution channels and sound balance sheet, Moody's said.

The company exhibits good risk-adjusted capitalization with a high-quality, liquid investment portfolio and short-tail, granular insurance liabilities, the agency said.

These strengths are partly offset by Progressive's relatively high operating leverage and its aggressive payments to shareholders through variable and special dividends and share buybacks, Moody's said.

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