The Hartford 2007 Annual Report Download - page 242

THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
F-65
14. Debt
The following table presents short-term and long-term debt by issuance and consumer notes as of December 31, 2007 and 2006.
Short-Term Debt 2007 2006
Commercial paper $ 373 $ 299
Current maturities of long-term debt and capital lease obligations 992 300
Total Short-Term Debt $ 1,365 $ 599
Long-Term Debt
Senior Notes and Debentures
6.375% Notes, due 2008 $ — $ 200
5.663% Notes, due 2008 — 330
5.55% Notes, due 2008 — 425
7.9% Notes, due 2010 275 274
5.25% Notes, due 2011 400 399
4.625% Notes, due 2013 319 319
4.75% Notes, due 2014 199 199
7.3% Notes, due 2015 200 200
5.5% Notes, due 2016 300 299
5.375% Notes, due 2017 499 —
7.65% Notes, due 2027 147 147
7.375% Notes, due 2031 92 92
5.95% Notes, due 2036 298 298
6.1% Notes, due 2041 322 322
Total Senior Notes and Debentures 3,051 3,504
Capital lease obligations 91 —
Total Long-Term Debt $ 3,142 $ 3,504
Consumer Notes
Retail notes payable, interest rates ranging from 4.75% to 6.25% for fixed notes and for
variable notes, either consumer price index plus 157 basis points to 267 basis points, or
indexed to the S&P 500, Dow Jones Industrials or the Nikkei 225, due in varying amounts to
2031, callable beginning in 2008 $ 809 $ 258
Total Consumer Notes $ 809 $ 258
The Hartford’ s long-term debt securities are issued by either The Hartford Financial Services Group, Inc. (“HFSG”) or HLI and are
unsecured obligations of HFSG or HLI and rank on a parity with all other unsecured and unsubordinated indebtedness of HFSG or
HLI.
On September 1, 2007, The Hartford repaid $300 of 4.7% senior notes at maturity.
On March 9, 2007, The Hartford issued $500 of 5.375% senior notes due March 15, 2017.
On December 15, 2006, The Hartford redeemed its $200 7.1% senior notes due 2007 at a price of $202 plus accrued and unpaid
interest.
On November 17, 2006, The Hartford retired its $500 7.45% junior subordinated debentures underlying the trust preferred securities
due 2050 issued by Hartford Capital III at par. The Company recognized a loss on extinguishment of $17, after-tax, for the write-off of
the unamortized issue costs and discount.
On October 10, 2006, the Company completed offers to exchange existing senior unsecured notes comprising the $250 of 7.65% notes
due 2027 and the $400 of 7.375% notes due 2031 issued by HLI (‘‘HLI notes’ ’ ) for up to $650 in new senior unsecured notes of the
Company and a cash payment, in order to consolidate debt at the holding company. The new notes have an extended maturity and bear
a market interest rate and, together with the cash payment, have a present value not significantly different than the existing notes using
the existing notes’ effective interest rates. On October 10, 2006, the Company issued approximately $409 of 6.1% senior notes due
October 1, 2041 and paid cash totaling $85 in exchange for $101 of the 7.65% notes due 2027 and $308 of the 7.375% notes due 2031.
Cash paid to holders of HLI notes in connection with the exchange offers is reflected on our balance sheet as a reduction of long-term
debt.
On October 3, 2006, the Company issued $400 of 5.25% senior notes due October 15, 2011, $300 of 5.50% senior notes due October
15, 2016, and $300 of 5.95% senior notes due October 15, 2036, and received total net proceeds of approximately $990.