{"url_path":"/sec/mcy/8-k/2026-06-24/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 Entry into a Material Agreement.","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-06-24","source_url":"https://www.sec.gov/Archives/edgar/data/64996/0001193125-26-281118-index.html","accession_number":"0001193125-26-281118","cik":"0000064996","ticker":"MCY","issuer_name":"MERCURY GENERAL CORP","edgar_url":"https://www.sec.gov/Archives/edgar/data/64996/0001193125-26-281118-index.html","primary_entity_key":"0000064996","primary_entity_name":"MERCURY GENERAL CORP"},"word_count":518,"has_tables":true,"body_markdown":"Item 1.01. Entry into a Material Agreement.\n\nSecond Amended and Restated Credit Agreement\n\nOn June 24, 2026 (the “Closing Date”), Mercury General Corporation (the “Company”) entered into a Second Amended and Restated Credit Agreement with the lenders named therein, Bank of America, N.A., as administrative agent, and the other parties party thereto (the “Second A&R Credit Agreement”). The Second A&R Credit Agreement provides for a five-year, $250.0 million unsecured revolving credit facility (the “Revolving Facility”) and replaces the Company’s existing Amended and Restated Credit Agreement dated as of March 31, 2021, among the Company, the lenders party thereto and Bank of America, N.A., as administrative agent. The Revolving Facility matures on June 24, 2031, and the proceeds of any borrowings under the Revolving Facility may be used for general corporate purposes.\n\nBorrowings under the Revolving Facility will bear interest at a fluctuating rate per annum equal to, at the Company’s option, Base Rate (as defined in the Second A&R Credit Agreement) or Term SOFR (as defined in the Second A&R Credit Agreement), in each case, plus an applicable margin that is calculated based on the Company’s Debt to Capital Ratio (defined as consolidated debt to consolidated shareholders’ equity plus consolidated debt) from time to time and ranges from 1.00% to 1.50% in the case of loans accruing interest based on Term SOFR and from 0.00% to 0.50% in the case of loans accruing interest based on Base Rate (it being understood that Term SOFR as defined can be no lower than 0.00% and Base Rate as defined can be no lower than 1.00%). In addition, the Company has agreed to pay to the lenders under the Second A&R Credit Agreement certain customary fees, including a commitment fee on the actual daily unused portion of the revolving commitments under the Revolving Facility, which ranges from 0.10% to 0.225% based on the Company’s Debt to Capital Ratio from time to time.\n\nThe Second A&R Credit Agreement contains representations and warranties, affirmative and negative covenants and events of default customary for unsecured financings of this type. The Second A&R Credit Agreement also contains the following financial covenants, in each case tested on a quarterly basis: (i) consolidated shareholders’ equity shall not be less than an amount equal to the sum of (a) $1,550.0 million plus (b) 25% of positive consolidated net income earned in each calendar year (commencing with the calendar year ending December 31, 2026), (ii) the Debt to Capital Ratio shall not exceed 35%, and (iii) the Risk Based Capital Ratio (defined as the “Total Adjusted Capital” (calculated in accordance with the accounting practices prescribed or permitted by the National Association of Insurance Commissioners) to the Company Action Level (as defined in the Second A&R Credit Agreement)) of certain material insurance subsidiaries shall be no less than 150%.\n\nThe foregoing description of the Second A&R Credit Agreement does not purport to be complete and is qualified in its entirety by reference to the Second A&R Credit Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference."}