ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT
On November 7, 2019, ProAssurance Corporation and participating lenders entered into an amended and restated revolving line of credit facility, increasing the available line of credit by $50 million to $250 million and extending the facility termination date to November 7, 2024. The facility continues to include an option to increase the line of credit by $50 million (“the accordion”), which, if exercised, would expand the available line to a total of $300 million.
The amended and restated facility extends and modifies the terms of an existing facility that originated on April 15, 2011. It will continue to allow us to borrow up to the aggregate amount of the unused lender commitment at any time prior to its termination. The interest rate we will pay depends on our credit ratings at the time we borrow the money, and on whether the borrowing is secured or unsecured. Participating lenders are U.S. Bank, Wells Fargo, Regions Bank, KeyBank, BB&T Bank, First Horizon Bank, and Cadence Bank.
Significant financial covenants require us to maintain a defined minimum consolidated net worth and a maximum leverage ratio, each determined as of the end of each of our fiscal quarters. The facility also includes customary representations, covenants and events in the event of default.
We anticipate that any funds we borrow under terms of the amended and restated facility will be used for general corporate purposes, including, but not limited to, use as short-term working capital, funding for share repurchases as authorized by our Board, and for support of other activities we enter into in the normal course of business including mergers and acquisitions.
We maintain various relationships, including the provision of financial services such as cash management and investment custodial arrangements and investment banking with some of the lenders participating in this Agreement.