UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 23, 2018 (May 17, 2018)
STATE AUTO FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
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Ohio
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000-19289
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31-1324304
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer
Identification No.)
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518 East Broad Street, Columbus, Ohio
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43215-3976
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
(614) 464-5000
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2)
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
¨
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Section 2.
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Financial Information
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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On May 17, 2018, State Auto Property & Casualty Insurance Company ("
SAPC
"
), a wholly owned subsidiary of State Auto Financial Corporation (the "
Company
"
), received a loan (the "
FHLB Loan
"
) from the Federal Home Loan Bank of Cincinnati ("
FHLB
"). The FHLB Loan is a 15-year term loan in the principal amount of $85,000,000 and provides for interest-only payments during its term, with principal due in full at maturity. The prepayment fee is equal to to the present value of 100% of the lost cash flow and the prepayment fee is due and payable on the date the advance is prepaid. The interest rate is fixed over the term of the loan at 3.96%. The FHLB Loan is fully secured by a pledge of specific investment securities of SAPC and replaces an existing loan with FHLB, as further described in Item 2.04.
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Item 2.04
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Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
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On May 17, 2018, SAPC retired a 20-year term loan from the FHLB in the principal amount of $85,000,000. The loan provided for interest-only payments during its term, with principal due in full at maturity. The interest rate was fixed over the term of the loan at 5.03%. The prepayment fee for retiring the loan prior to maturity was equal to the present value of 100% of the lost cash flow to the Bank. Prepayment fees were due and payable on the date the loan was retired.
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Section 9.
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Financial Statements and Exhibits
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Item 9.01.
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Financial Statements and Exhibits
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EXHIBIT INDEX
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Exhibit No.
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Description of Exhibit
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Advance dated as of May 17, 2018, between State Auto Property & Casualty and Federal Home Loan Bank of Cincinnati.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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STATE AUTO FINANCIAL CORPORATION
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Date: May 23, 2018
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/s/ Melissa A. Centers
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Senior Vice President, Secretary and General Counsel
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Exhibit 10.01
APPLICATION FOR ADVANCE
Email:
CreditOperations@fhlbcin.com
Phone: 800-828-4191 Fax: 513-852-5747
D.D.A. #
389001
Date:
05/17/2018
Pursuant to the BLANKET SECURITY AGREEMENT ("Agreement") and the RESOLUTION FOR ADVANCES ("Resolution") currently on file with the Federal Home Loan Bank of Cincinnati ("Bank"), the undersigned, who by the authority of the Member's Board of Directors are authorized to borrow from time to time under the "Agreement", hereby apply for an Advance for
$85,000,000
under the following terms and conditions. PROVIDED, however, that if the Member is in default under the terms of the "Agreement" or any other agreement with the Bank, which default is not waived by the Bank, such funds need not be made available by the Bank hereunder. In addition, the Bank will not be obligated to fund commitments for advances previously made to Members who become tangible capital insolvent or if the Bank is notified by the Members primary regulator or insurer that the Member has been restricted from using Federal Home Loan Bank advances.
COMMITMENT OPTIONS
þ
SAME DAY FUNDING
¨
NEXT DAY FUNDING
¨
SKIP DAY FUNDING
No fee, guarantee rate, total application to be disbursed. (Mandatory takedown if
next
or
skip
business day.)
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GUARANTEE FUNDS ONLY, OPTIONAL TAKEDOWN
365 day commitment, flat fee of 10 basis points. Payable on date of commitment, non-refundable.
SHORT TERM ADVANCE OPTIONS
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SHORT TERM FIXED RATE ADVANCE:
Term __________ (31 days to 11 Months Maturity).
¨
SHORT TERM VARIABLE RATE ADVANCE:
Term __________ (1 days to 365 Days Maturity).
PREPAYMENT FEE: The prepayment fee on the Short Term Fixed rate advance is the same as Long Term Fixed rate advance as described below. The Short Term Variable rated advance is prepayable without a fee at any time.
INTERST CALCULATION: The interest on the Short Term Fixed rate advance and and the Short Term Variable rate advance is calculated on the daily opening balance on an actual/360 basis using the effective rate at the time of disbursement. The repricing rate on the Short Term Variable will be the A.M. rate in effect each day the advance is outstanding.
LONG TERM FIXED RATE ADVANCE
þ
LONG TERM FIXED RATE ADVANCE:
Term ____
180
___ Months (greater than 11 to 240 Months Maturity).
Amortization:
(Fill in preference
only
if principal payments should be made. Otherwise, principal will be charged at maturity.)
Monthly $___________ Quarterly $____________ Semiannually $________________ Annually $__________
INTEREST CALCULATION:
The interest on the Long Term Fixed rate advance is calculated on the daily opening balance on an actual/actual basis, using the effective rate at the time of disbursement.
PREPAYMENT FEE
shall be equal to the present value of 100% of the lost cash flow to the Bank based upon the difference between the yield on Federal Home Loan Bank securities of the same remaining maturity, or, if the advance is amortized, the current yield on the Federal Home Loan Bank securities of the same remaining effective weighted average maturity, discounted at the current yield on Federal Home Loan Bank securities. Prepayment fees are due and payable on the date the advance is prepaid.
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State Auto Property & Casualty Insurance Co.
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Columbus, Ohio
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(FHLB Member)
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(City, State)
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/s/ Michael E. LaRocco
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/s/ Steven E. English
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(Authorized Signature)
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(Authorized Signature)
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Michael E. LaRocco
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Steven E. English
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(Typed Name of Authorized Signature)
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(Typed Name of Authorized Signature)
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APPLICATION REQUIRES TWO SIGNATURES OF INDIVIDUALS AUTHORIZED BY THE RESOLUTION FOR ADVANCES OH FILE WITH THE BANK
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By signing above
,
the member certifies
,
(A. That thi
s
applicat
i
on has no
t been
modified from its original terms as provided by the Bank) and (B. This application complie
s
with and is subject to the Bank'
s
Credit Policy terms in effect at the time of application)
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The Bank reserves the r
i
ght to su
s
pend or mod
i
fy the adva
n
ce
c
ommitment opt
i
ons at any time
.
Immed
i
ate funding may be available if application i
s
re
c
e
i
ved prio
r t
o 3
:
00 P
.
M
.,
Eastern S
ta
nd
a
rd Time
.
(R
e
vised July 201
6
)