The Hartford 2010 Annual Report Download - page 202

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
F-74
14. Debt
The Hartford’ s long-term debt securities are issued by either The Hartford Financial Services Group, Inc. (“HFSG Holding Company”)
or Hartford Life, Inc. (“HLI”) and are unsecured obligations of HFSG Holding Company or HLI and rank on a parity with all other
unsecured and unsubordinated indebtedness of HFSG Holding Company or HLI. In addition to HFSG Holding Company and HLI, The
Hartford acquired $5 in junior subordinated debt of Federal Trust Corporation, see Note 22.
Debt is carried net of discount. The following table presents short-term and long-term debt by issuance as of December 31, 2010 and
2009.
Short-Term Debt 2010 2009
Current maturities of long-term debt and capital lease obligations $ 400 $ 343
Total Short-Term Debt $ 400 $ 343
Long-Term Debt
Senior Notes and Debentures
5.25% Notes, due 2011 — 400
4.625% Notes, due 2013 320 320
4.75% Notes, due 2014 200 199
4.0% Notes, due 2015 300 —
7.3% Notes, due 2015 200 200
5.5% Notes, due 2016 300 300
5.375% Notes, due 2017 499 499
6.3% Notes, due 2018 500 500
6.0% Notes, due 2019 500 499
5.5% Notes, due 2020 499 —
7.65% Notes, due 2027 149 149
7.375% Notes, due 2031 92 92
5.95% Notes, due 2036 298 298
6.625% Notes, due 2040 299 —
6.1% Notes, due 2041 324 323
Total Senior Notes and Debentures 4,480 3,779
Junior Subordinated Debentures
3 month LIBOR plus 295 basis points, Notes due 2033 5 5
8.125% Notes, due 2068 500 500
10.0% Notes, due 2068 1,222 1,212
Total Junior Subordinated Debentures 1,727 1,717
Total Long-Term Debt $ 6,207 $ 5,496
The effective interest rate on the 6.1% senior notes due 2041 is 7.9%, on the 3 month LIBOR plus 295 basis points junior subordinated
debentures due 2033 is 3.0%, and on the 10.0% junior subordinated debentures due 2068 is 15.3%. The effective interest rate on the
remaining notes does not differ materially from the stated rate.
Interest Expense
The following table presents interest expense incurred for 2010, 2009, and 2008, respectively.
For the years ended December 31,
2010 2009 2008
Short-term debt $ — $ 3 $11
Long-term debt 508 473 332
Total interest expense $ 508 $ 476 $343
The weighted-average interest rate on commercial paper was 2.4% and 2.9% for 2009, and 2008, respectively. The Company did not
hold commercial paper in 2010.
Senior Notes
On June 15, 2010, The Hartford repaid its $275, 7.9% senior notes at maturity.
On March 23, 2010, The Hartford issued $1.1 billion aggregate principal amount of its senior notes. The issuance consisted of $300 of
4.0% senior notes due March 30, 2015, $500 of 5.5% senior notes due March 30, 2020 and $300 of 6.625% senior notes due March 30,
2040. The senior notes bear interest at their respective rate, payable semi-annually in arrears on March 30 and September 30 of each
year, beginning September 30, 2010.