The Hartford 2015 Annual Report Download - page 201

Table of Contents THE HARTFORD FINANCIAL SERVICES GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
11. Debt
F-70
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:
As of December 31,
2015 2014
Revolving Credit Facilities $ — $ —
Senior Notes and Debentures
4.0% Notes, due 2015 — 289
7.3% Notes, due 2015 — 167
5.5% Notes, due 2016 275 275
5.375% Notes, due 2017 416 415
4.0% Notes, due 2017 — 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 797 797
7.65% Notes, due 2027 80 80
7.375% Notes, due 2031 63 63
5.95% Notes, due 2036 299 299
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
Junior Subordinated Debentures
7.875% Notes, due 2042 600 600
8.125% Notes, due 2068 500 500
Total Notes and Debentures 5,359 6,109
Less: Current maturities 275 456
Long-Term Debt 5,084 5,653
Total Debt $ 5,359 $ 6,109
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 $357, $376 and $397 on long-term debt for the years ended
December 31, 2015, 2014 and 2013, respectively.
Collateralized Advances
Hartford Life Insurance Company (“HLIC”), an indirect wholly owned subsidiary, is a member of the Federal Home Loan Bank of
Boston (“FHLBB”). Membership allows HLIC access to collateralized advances, which may be used to support various spread-based
businesses and enhance liquidity management. FHLBB membership requires the company to own member stock and advances require
the purchase of activity stock. The amount of advances that can be taken are dependent on the asset types pledged to secure the
advances. The Connecticut Department of Insurance (“CTDOI”) will permit HLIC to pledge up to $1.2 billion in qualifying assets to
secure FHLBB advances for 2016. 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 in order to exceed these limits. As of December 31, 2015, HLIC had no
advances outstanding under the FHLBB facility.
Senior Notes
On March 30, 2015, the Company repaid its $289, 4.0% senior notes at maturity. On May 27, 2015, the Company redeemed for cash the
entire $296 aggregate principal amount outstanding of 4.0% senior notes due October 15, 2017 for $317 including a make-whole
premium. On November 2, 2015, the Company repaid its $167, 7.3% senior notes at maturity. The Company funded the maturities of the
4.0% and 7.3% senior notes along with the redemption of the 4.0% senior notes with cash on hand.