Travelers 2009 Annual Report Download - page 230

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. DEBT (Continued)
The following table presents merger-related unamortized fair value adjustments and the related
effective interest rate:
Unamortized Fair
Value Purchase
Adjustment at Effective
December 31, Interest Rate
(in millions) Issue Rate Maturity Date 2009 2008 to Maturity
Senior notes ........................ 8.125% Apr. 2010 $3 $12 4.257%
Medium-term notes ................... 7.415% Aug. 2010 —1 3.310%
Subordinated debentures ............... 7.625% Dec. 2027 20 20 6.147%
8.500% Dec. 2045 16 16 6.362%
8.312% Jul. 2046 19 19 6.362%
Total ............................ $58 $68
On April 1, 2004, The Travelers Companies, Inc. fully and unconditionally guaranteed the payment
of all principal, premiums, if any, and interest on certain debt obligations of its subsidiaries TPC and
Travelers Insurance Group Holdings Inc. (TIGHI). The guarantees pertain to the $500 million 5.00%
notes due 2013, the $200 million 7.75% notes due 2026 and the $500 million 6.375% notes due 2033.
Maturities—The amount of debt obligations, other than commercial paper, that become due in
each of the next five years is as follows: 2010, $273 million; 2011, $11 million; 2012, $250 million; 2013,
$500 million; and 2014, none.
Line of Credit Agreement
The Company has $1.0 billion, five-year revolving credit agreement with a syndicate of financial
institutions that expires on June 10, 2010. Pursuant to covenants in the credit agreement, 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. In addition,
the credit agreement contains other customary restrictive covenants as well as certain customary events
of default, including with respect to a change in control. At December 31, 2009, the Company was in
compliance with these covenants and all other covenants related to its outstanding debt instruments.
There were no amounts outstanding under the credit agreement as of December 31, 2009 or 2008.
Shelf Registration
In December 2008, the Company filed with the Securities and Exchange Commission a universal
shelf registration statement for the potential offering and sale of securities to replace its expiring
universal shelf registration statement. The Company may offer these securities from time to time at
prices and on other terms to be determined at the time of offering. During 2009, the Company issued
securities with a principal amount of $500 million under the new shelf registration statement, and in
2008, the Company issued securities with a principal amount of $500 million under the prior shelf
registration statement.
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