Travelers 2014 Annual Report Download - page 219

Table of Contents
THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. DEBT (Continued)
2013 Debt Repayment. On March 15, 2013, the Company's $500 million, 5.00% senior notes matured and were fully paid.
2012 Debt Repayments. On May 29, 2012, the Company purchased and retired $8.5 million aggregate principal amount of its 6.25% fixed - to -
floating rate junior subordinated debentures due March 15, 2067. On June 15, 2012, the Company's $250 million, 5.375% senior notes matured and
were fully paid.
Description of Debt
Commercial Paper—The Company maintains an $800 million commercial paper program, supported by a $1.0 billion bank credit agreement that
expires on June 7, 2018. (See "Credit Agreement" discussion that follows). Interest rates on commercial paper issued in 2014 ranged from 0.08% to
0.15%, and in 2013 ranged from 0.08% to 0.13%.
Senior Notes—The Company's various senior debt issues are unsecured obligations that rank equally with one another. Interest payments are
made semi
- annually. The Company generally may redeem some or all of the notes prior to maturity in accordance with terms unique to each debt
instrument.
Junior Subordinated Debentures—The Company's $107 million remaining aggregate principal amount of 6.25% fixed
- to - floating rate
debentures bear interest at an annual rate of 6.25% from the date of issuance to, but excluding, March 15, 2017, payable semi
- annually in arrears on
March 15 and September 15. From and including March 15, 2017, the debentures will bear interest at an annual rate equal to three
- month LIBOR
plus 2.215%, payable quarterly on March 15, June 15, September 15 and December 15 of each year. The Company can redeem the debentures at its
option, in whole or in part, at any time on or after March 15, 2017 at a redemption price of 100% of the principal amount being redeemed plus
accrued but unpaid interest. The Company can redeem the debentures at its option prior to March 15, 2017 (a) in whole at any time or in part from
time to time or (b) in whole, but not in part, in the event of certain tax or rating agency events relating to the debentures, at a redemption price equal
to the greater of 100% of the principal amount being redeemed and the applicable make
- whole amount, in each case plus any accrued and unpaid
interest.
The Company has the right, on one or more occasions, to defer the payment of interest on the debentures. The Company will not be required
to settle deferred interest until it has deferred interest for five consecutive years or, if earlier, made a payment of current interest during a deferral
period. The Company may defer interest for up to ten consecutive years without giving rise to an event of default. Deferred interest will accumulate
additional interest at an annual rate equal to the annual interest rate then applicable to the debentures.
The debentures have a final maturity date of March 15, 2067 and a scheduled maturity date of March 15, 2037. The Company can redeem the
debentures at its option any time (as described above) using any source of funds, including cash. If the Company chooses not to redeem the
debentures, then during the 180
- day period ending not more than 15 and not less than ten business days prior to the scheduled maturity date, the
Company will be required to use commercially reasonable efforts to sell enough qualifying capital securities to permit repayment of the debentures
at the scheduled maturity date. If any debentures remain outstanding after the scheduled maturity date, unless and until the Company redeems the
debentures (as described above) using any source of funds, including cash, the
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