The Hartford 2014 Annual Report Download - page 208

Table of Contents



The Company’s long-term debt securities are issued by either HFSG Holding Company or 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.
Debt is carried net of discount. Short-term and long-term debt by issuance are as follows:

 
 $ — $ 238

4.75% Notes, due 2014 — 200
4.0% Notes, due 2015 289 289
7.3% Notes, due 2015 167 167
5.5% Notes, due 2016 275 275
5.375% Notes, due 2017 415 415
4.0% Notes, due 2017 295 295
6.3% Notes, due 2018 320 320
6.0% Notes, due 2019 413 413
5.5% Notes, due 2020 499 499
5.125% Notes, due 2022 797 796
7.65% Notes, due 2027 80 79
7.375% Notes, due 2031 63 63
5.95% Notes, due 2036 299 298
6.625% Notes, due 2040 295 295
6.1% Notes, due 2041 326 326
6.625% Notes, due 2042 178 178
4.3% Notes, due 2043 298 298

7.875% Notes, due 2042 600 600
8.125% Notes, due 2068 500 500
Total Notes and Debentures  
Less: Current maturities 456 200
  
    
The effective interest rate on the 6.1% senior notes due 2041 is 7.9%. The effective interest rate on the remaining notes does not differ materially from the
stated rate. The Company incurred interest expense of $376, $397 and $457 on long-term debt for the years ended December 31, 2014, 2013 and 2012,
respectively.

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 businesses and enhance liquidity
management. The Connecticut Department of Insurance (“CTDOI”) will permit HLIC to pledge up to $1.39 billion in qualifying assets to secure FHLBB
advances for 2015. 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, 2014, HLIC had no advances outstanding under the FHLBB facility.

On March 26, 2013, the Company repurchased principal amounts of approximately $800, plus a payment for unpaid interest on senior notes due through the
settlement date. The Company recognized a loss on extinguishment in 2013 of approximately $213, before tax, representing the excess of the repurchase
price over the principal repaid and the write-off of the unamortized discount and debt issuance costs.
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