Travelers 2004 Annual Report Download - page 175

THE ST. PAUL TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
10. DEBT, Continued
commitment for each line of credit, a utilization fee. The applicable margin and the rates on which the
commitment fee and utilization fee are based vary based upon the Company’s long-term senior unsecured non-
credit-enhanced debt ratings.
Covenants. Pursuant to covenants in the 5-Year Line of Credit and STA 364-Day Line of Credit, the
Company must maintain an excess of consolidated net worth over goodwill and other intangible assets of not less
than $10 billion at all times. The Company must also maintain a ratio of total consolidated debt to the sum of
total consolidated debt plus consolidated net worth of not greater than 0.40 to 1.00. Pursuant to the covenants in
the 45-Month Line of Credit, TPC and its subsidiaries must maintain, as of the last day of any fiscal quarter,
combined statutory capital and surplus in excess of $5.50 billion and a leverage ratio of total consolidated debt to
total consolidated capital of less than 0.45 to 1.00. There were no ratings based triggers for the Company Lines of
Credit. At December 31, 2004, the Company was in compliance with these covenants and all other covenants
related to its respective debt instruments outstanding.
Event of Default. An event of default will occur if there is a change in control (as defined in the 45-Month
Line of Credit and 5-Year Line of Credit agreements). The merger of TPC and SPC did constitute a change in
control for both TPC and SPC; however, both entities did obtain a waiver from their respective banks of that
event of default. There were no amounts outstanding under the Company Line of Credit at December 31, 2004.
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