Unum 2011 Annual Report Download - page 139
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Unum 2011 Annual Report
Unum
2011
137
Note 7. Debt
Long-term and short-term debt consists of the following:
December 31
(in millions of dollars) 2011 2010
Senior Secured Notes, variable due 2037, callable at or above par $ 560.0 $ 634.4
Senior Secured Notes, variable due 2036, callable at or above par 72.5 82.5
Notes @ 7.375% due 2032, callable at or above par 39.5 39.5
Notes @ 6.75% due 2028, callable at or above par 165.8 165.8
Notes @ 7.25% due 2028, callable at or above par 200.0 200.0
Notes @ 5.625% due 2020, callable at or above par 399.6 399.5
Notes @ 7.125% due 2016, callable at or above par 358.8 335.6
Notes @ 6.85% due 2015, callable at or above par 296.7 296.7
Notes @ 7.0% due 2018, non-callable 200.0 200.0
Medium-term Notes @ 7.0% to 7.2% due 2023 to 2028, non-callable 50.8 50.8
Junior Subordinated Debt Securities @ 7.405% due 2038 226.5 226.5
Long-term Debt 2,570.2 2,631.3
Securities Lending Agreements — See Note 3 312.3 —
Notes @ 7.625% due 2011 — 225.1
Short-term Debt 312.3 225.1
Total $2,882.5 $2,856.4
Collateralized debt, which consists of the senior secured notes, ranks highest in priority, followed by unsecured notes, which consists
of notes and medium-term notes, followed by junior subordinated debt securities. The junior subordinated debt securities due 2038 are
callable under limited, specified circumstances. The remaining callable debt may be redeemed, in whole or in part, at any time.
The aggregate contractual principal maturities are $296.9 million in 2015, $350.0 million in 2016, and $1,915.1 million in 2018
and thereafter.
Senior Secured Notes
In 2007, Northwind Holdings, LLC (Northwind Holdings), a wholly-owned subsidiary of Unum Group, issued $800.0 million of insured,
senior, secured notes due 2037 (the Northwind notes) in a private offering. The Northwind notes bear interest at a floating rate equal to the
three-month LIBOR plus 0.78%.
Northwind Holdings’ ability to meet its obligations to pay principal, interest, and other amounts due on the Northwind notes will be
dependent principally on its receipt of dividends from Northwind Reinsurance Company (Northwind Re), the sole subsidiary of Northwind
Holdings. Northwind Re reinsured the risks attributable to specified individual disability insurance policies issued by or reinsured by
Provident Life and Accident Insurance Company, Unum Life Insurance Company of America (Unum America), and The Paul Revere Life
Insurance Company (collectively, the ceding insurers) pursuant to separate reinsurance agreements between Northwind Re and each of the
ceding insurers. The ability of Northwind Re to pay dividends to Northwind Holdings will depend on its satisfaction of applicable regulatory
requirements and the performance of the reinsured policies.