The Hartford 2011 Annual Report Download - page 205

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
F-70
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”), an indirect wholly owned subsidiary, 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.
Debt is carried net of discount. The following table presents short-term and long-term debt by issuance as of December 31, 2011 and
2010.
Short-Term Debt
2011
2010
Current maturities of long-term debt and capital lease obligations
$
—
$
400
Total Short-Term Debt
$
—
$
400
Long-Term Debt
Senior Notes and Debentures
4.625% Notes, due 2013
320
320
4.75% Notes, due 2014
200
200
4.0% Notes, due 2015
300
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
500
5.5% Notes, due 2020
499
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
299
6.1% Notes, due 2041
325
324
Total Senior Notes and Debentures
4,481
4,480
Junior Subordinated Debentures
3 month LIBOR plus 295 basis points, Notes due 2033
—
5
8.125% Notes, due 2068
500
500
10.0% Notes, due 2068
1,235
1,222
Total Junior Subordinated Debentures
1,735
1,727
Total Long-Term Debt
$
6,216
$
6,207
The effective interest rates on the 6.1% senior notes due 2041 and the 10.0% junior subordinated debentures due 2068 are 7.9% and
15.3%, respectively. 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 2011, 2010, and 2009, respectively.
For the years ended December 31,
2011
2010
2009
Short-term debt
$
–
$
—
$
3
Long-term debt
508
508
473
Total interest expense
$
508
$
508
$
476
Short-Term Debt
Hartford Life Insurance Company (“HLIC”), an indirect wholly owned subsidiary, became a member of the Federal Home Loan Bank
of Boston (“FHLBB”) in May 2011. Membership allows HLIC access to collateralized advances, which may be used to support various
spread-based business and enhance liquidity management. The Connecticut Department of Insurance (“CTDOI”) will permit HLIC to
pledge up to $1.48 billion in qualifying assets to secure FHLBB advances for 2012. The amount of advances that can be taken are
dependent on the asset types pledged to secure the advances. The pledge limit is recalculated annually based on statutory admitted
assets and capital and surplus. HLIC would need to seek the prior approval of the CTDOI if there were a desire to exceed these limits.
As of December 31, 2011, HLIC had no advances outstanding under the FHLBB facility.