MERCURY GENERAL CORP 8-K

What Happened
Mercury General Corporation announced on June 24, 2026 that it entered into a Second Amended and Restated Credit Agreement (the "Second A&R Credit Agreement") with Bank of America, N.A., as administrative agent, and other lenders. The agreement establishes a five‑year, $250.0 million unsecured revolving credit facility maturing June 24, 2031, to be used for general corporate purposes and replaces the company’s prior credit agreement dated March 31, 2021.

Key Details

• Facility size and term: $250.0 million unsecured revolving facility maturing June 24, 2031.
• Interest and fees: Borrowings priced at the Company’s option of Base Rate or Term SOFR plus a margin that varies with the Company’s Debt to Capital Ratio — margin ranges 1.00%–1.50% for Term SOFR loans and 0.00%–0.50% for Base Rate loans. Term SOFR floor 0.00%; Base Rate floor 1.00%. Commitment fee on unused portion: 0.10%–0.225% (based on Debt to Capital Ratio).
• Financial covenants (quarterly tests): consolidated shareholders’ equity must be at least $1,550.0 million plus 25% of positive consolidated net income earned each year (beginning with year ending Dec 31, 2026); Debt to Capital Ratio ≤ 35%; Risk Based Capital Ratio for certain insurance subsidiaries ≥ 150%.
• Administrative agent and filing: Bank of America, N.A. serves as administrative agent; the credit agreement is filed as Exhibit 10.1 to the 8‑K. The report is signed by CFO Theodore Stalick.

Why It Matters
This agreement provides Mercury with committed liquidity capacity ($250M) for general corporate needs and updates borrowing terms and covenants. Investors should note the covenant levels (equity floor, leverage cap, and insurance subsidiary capital requirement) because they limit leverage and can affect the company’s flexibility to borrow or make capital decisions if covenant tests tighten. The facility replaces the prior 2021 agreement and extends committed credit availability through mid‑2031.