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Unum 2011 Annual Report
Unum
2011
139
Unsecured Notes
In 2010, we issued $400.0 million of unsecured senior notes in a public offering, and we purchased and retired $10.0 million of our
7.08% medium-term notes due 2024.
In 2009, we issued $350.0 million of unsecured senior notes in a public offering. In 2009, we purchased and retired $1.2 million
aggregate principal of our 7.19% medium-term notes due 2028 and $0.6 million aggregate principal of our 6.75% notes due 2028.
In 2005, UnumProvident Finance Company plc, a wholly-owned subsidiary of Unum Group, issued 6.85% senior debentures due 2015.
These debentures are fully and unconditionally guaranteed by Unum Group.
Fair Value Hedge
In 2010, we entered into an interest rate swap to effectively convert our $350.0 million aggregate principal amount of 7.125%
unsecured senior notes into floating rate debt. Under this agreement, we receive a fixed rate of interest and pay a variable rate of interest,
based off of three-month LIBOR. The fair value adjustment of the swap resulted in an increase (decrease) of the carrying amount of the
hedged debt of $8.8 million and $(14.4) million at December 31, 2011 and 2010, respectively.
Junior Subordinated Debt Securities
In 1998, Provident Financing Trust I (the trust) issued $300.0 million of 7.405% capital securities in a public offering. These capital
securities, which mature in 2038, are fully and unconditionally guaranteed by Unum Group, have a liquidation value of $1,000 per capital
security, and have a mandatory redemption feature under certain circumstances. Unum Group issued 7.405% junior subordinated deferrable
interest debentures to the trust in connection with the capital securities offering. The debentures mature in 2038. The sole assets of the
trust are the junior subordinated debt securities.
Short-term Debt
In 2011, the remaining $225.1 million of our 7.625% senior notes due March 2011 matured.
In 2009, the remaining $132.2 million of our outstanding 5.859% notes due May 2009 matured. We also repaid $58.3 million of reverse
repurchase agreements outstanding at December 31, 2008.
Interest and Debt Expense
Interest paid on long-term and short-term debt and related securities during 2011, 2010, and 2009 was $145.4 million, $140.7 million,
and $122.0 million, respectively.
Shelf Registration
We have a shelf registration, which we renewed in 2011, with the Securities and Exchange Commission to issue various types
of securities, including common stock, preferred stock, debt securities, depository shares, stock purchase contracts, units and warrants, or
preferred securities of wholly-owned finance trusts. The shelf registration enables us to raise funds from the offering of any securities
covered by the shelf registration as well as any combination thereof, subject to market conditions and our capital needs.