Penn National Announces Surplus Note Offering

April 22, 2004

Penn National Insurance of Harrisburg, Pa. is issuing $50 million in surplus notes of Pennsylvania National Mutual Casualty Insurance Company. Bear, Stearns & Co. Inc. will serve as the sole bookrunning manager for this offering.

The company is planning to use the proceeds obtained through the issuance of the surplus notes to make a capital contribution to its downstream holding company, Penn National Holding Corporation, which will use the capital to redeem all of its outstanding Series B preferred stock and repurchase all of its outstanding warrants.

President and CEO Dennis C. Rowe, CPCU, said, “Our objectives have focused on achieving consistent profitability and strengthening our key operating statistics. As we have accomplished those objectives, we positioned ourselves to restructure our outside capital under more favorable terms, which we are doing with the issuance of these surplus notes.”

Penn National Insurance ( is the registered trademark of the Pennsylvania National Mutual Casualty Insurance Company and its affiliated companies. Penn National Insurance is a regional property- casualty insurance group, consisting of Pennsylvania National Mutual Casualty Insurance Company, Penn National Security Insurance Company, and Founders Insurance Company. Penn National Insurance sells personal and commercial insurance in PA, MD, DE, NJ, VA, NC, SC, TN, and AL, through a network of more than 750 independent agencies. The company wrote $546.4 million in premium in 2003, achieved net income of $34.5 million, and total assets of $1.3 billion. The company employs approximately 900 people, in offices in Harrisburg, Pennsylvania (headquarters), and regional underwriting and claims service offices throughout its sales and service territory. The company is ranked in the top 100 largest property-casualty groups in the country by A. M. Best, and has a Best’s rating of “A- (Excellent).”

Topics Pennsylvania Casualty

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