Unum 2007 Annual Report Download - page 118

Notes to Consolidated Financial Statements
116 Unum 2007 Annual Report
Tailwind Holdings is required to repay a portion of the outstanding principal under the Tailwind notes at par on the quarterly scheduled
payment dates under the Tailwind notes in an amount equal to the lesser of (i) a targeted amortization amount as defined in the Tailwind
indenture and (ii) the amount of the remaining available funds in the Tailwind DSCA minus an amount equal to the minimum balance that
is required to be maintained in the Tailwind DSCA under the Tailwind indenture, provided that Tailwind Holdings has sufficient funds available
to pay its other expenses, including interest payments on the Tailwind notes, and to maintain the minimum balance in the Tailwind DSCA as
required under the Tailwind indenture. During 2007, Tailwind Holdings made principal payments of $17.5 million on the Tailwind notes.
In November 2007, we purchased and retired $17.5 million of our outstanding 6.75% notes scheduled to mature in 2028. During
December 2007, pursuant to a tender offer, we purchased and retired $23.5 million aggregate liquidation amount of the 7.405% junior
subordinated debt securities due 2038; $99.9 million aggregate principal amount of the 7.625% notes due 2011; $210.5 million aggregate
principal amount of the 7.375% notes due 2032; and $66.1 million aggregate principal amount of the 6.75% notes due 2028. We also
called and retired all $150.0 million principal amount of our outstanding 7.25% notes scheduled to mature in 2032.
In June 2006, pursuant to a tender offer, we purchased and retired $50.0 million aggregate liquidation amount of our outstanding 7.405%
junior subordinated debt securities due 2038 and $250.0 million aggregate principal amount of our outstanding 7.625% notes due 2011.
In November 2005, UnumProvident Finance Company plc, a wholly-owned subsidiary of Unum Group, issued $400.0 million of
6.85% senior debentures due 2015 in a private offering and received net proceeds of $399.6 million. These debentures are fully and
unconditionally guaranteed by Unum Group. In June 2007 and December 2006, $34.5 million and $32.0 million of these debentures
were redeemed, respectively.
In May 2004, Unum Group issued 12.0 million 8.25% adjustable conversion-rate equity security units (units) in a private offering
for $300.0 million. We subsequently registered the privately placed securities for resale by the private investors. Each unit had a stated
amount of $25 and consisted of (a) a contract pursuant to which the holder agrees to purchase, for $25, shares of Unum Group’s common
stock on May 15, 2007 and which entitled the holder to contract adjustment payments at the annual rate of 3.165 percent, payable quarterly,
and (b) a 1/40 or 2.5 percent ownership interest in a senior note issued by Unum Group due May 15, 2009 with a principal amount of
$1,000, on which we paid interest at the initial annual rate of 5.085 percent, payable quarterly. The scheduled remarketing of the senior
note element of these units occurred in February 2007, as stipulated by the terms of the original offering, and we reset the interest rate
on $300.0 million of senior notes due May 15, 2009 to 5.859%. We purchased $150.0 million of the senior notes in the remarketing which
were subsequently retired. In May 2007, we settled the purchase contract element of the units by issuing 17.7 million shares of common
stock. We received proceeds of approximately $300.0 million from the transaction.
In May 2003, Unum Group issued 23.0 million 8.25% adjustable conversion-rate equity security units (units) in a public offering
for $575.0 million. Each unit had a stated amount of $25 and initially consisted of (a) a contract pursuant to which the holder agreed to
purchase, for $25, shares of Unum Group’s common stock on May 15, 2006 and which entitled the holder to contract adjustment payments
at the annual rate of 2.25 percent, payable quarterly, and (b) a 1/40, or 2.5 percent, ownership interest in a senior note issued by Unum
Group due May 15, 2008 with a principal amount of $1,000, on which we paid interest at the initial annual rate of 6.00 percent, payable
quarterly. The scheduled remarketing of the senior note element of these units occurred in February 2006, as stipulated by the terms
of the original offering, and we reset the interest rate on $575.0 million of senior notes due May 15, 2008 to 5.997%. We purchased
$400.0 million of the senior notes in the remarketing which were subsequently retired. Upon settlement of the common stock purchase
contract in May 2006, we received proceeds of approximately $575.0 million and issued 43.3 million shares of common stock.