Item 1.01 Entry into a Material Definitive Agreement.
On October 27, 2021, The Hartford Financial Services Group, Inc. (the "Company") entered into an Amended and Restated Credit Agreement (the "Credit Agreement"), among the Company, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Citibank, N.A., U.S. Bank National Association and Wells Fargo Bank, National Association, as syndication agents, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, JP Morgan Chase Bank, N.A., Citigroup Global Markets Inc., U.S. Bank National Association and Wells Fargo Securities LLC as joint lead arrangers and joint bookrunners and the other lenders party thereto. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Credit Agreement.
The Credit Agreement provides for revolving loans as well as for the issuance of letters of credit up to an aggregate of $750 million committed by the lenders party thereto, with a $100 million sublimit on outstanding letters of credit at any time. The Credit Agreement also permits the Company to request an increase of the credit facility from time to time by up to an aggregate additional $500 million from certain lenders that elect to make such increase available, upon the satisfaction of certain conditions. The Company has unconditionally and irrevocably guaranteed the obligations of each of its subsidiaries that is named as a borrower under the Credit Agreement.
The Credit Agreement will expire on the earlier of (a) October 27, 2026 or (b) the date of termination in whole of the commitments. The Company may optionally prepay the loans or irrevocably reduce or terminate the unutilized portion of the commitments under the Credit Agreement, in whole or in part, without premium or penalty at any time by the delivery of a notice to that effect as provided under the Credit Agreement. Borrowings under the Credit Agreement may be used for general corporate purposes of the Company and its subsidiaries.
The Credit Agreement (x) requires the Company to maintain a minimum consolidated net worth of $11.25 billion and (y) subjects the Company to a limit on the ratio of consolidated total debt to consolidated total capitalization of 35%, in each case subject to the limitations and exceptions contained in the Credit Agreement. The Credit Agreement establishes rates for borrowings in alternative currencies and contains provisions specifying alternative interest rate calculations to be employed at such time as LIBOR ceases to be available as a benchmark for establishing the interest rate on borrowings based on LIBOR. In addition, the Credit Agreement contains certain customary representations, warranties and affirmative and negative covenants, including covenants that, among other things, limit the ability of the Company and its subsidiaries to incur certain types of liens, enter into certain mergers or consolidations, and use proceeds of borrowings under the Credit Agreement other than for certain permitted uses. These covenants are subject to a number of important exceptions and qualifications.
Amounts due under the Credit Agreement may be accelerated upon an “event of default,” as defined in the Credit Agreement, such as failure to pay amounts owed thereunder when due, a breach of a covenant, material inaccuracy of a representation or the occurrence of bankruptcy, if not otherwise waived or cured.
Certain of the lenders and the agents (and their respective subsidiaries or affiliates) under the Credit Agreement have in the past provided, and may in the future provide, investment banking, underwriting, lending, commercial banking, trust and other advisory services to the Company, its subsidiaries or affiliates. These parties have received, and may in the future receive, customary compensation from the Company, its subsidiaries or affiliates, for such services.
The foregoing description of the Credit Agreement is not complete and is qualified in its entirety by reference to the Credit Agreement, which is filed as Exhibit 10.1 to this Form 8-K and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 2.03.