Unum 2013 Annual Report Download - page 141

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UNUM 2013 ANNUAL REPORT / 139
Unsecured Notes
In August 2012, we issued $250.0 million of unsecured senior notes in a public offering.
In 2011, the remaining $225.1 million of our 7.625% senior notes due March 2011 matured.
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 Hedges
As of December 31, 2013 and 2012, we had $600.0 million notional amount interest rate swaps which effectively convert certain
of our unsecured senior notes into floating rate debt. Under these agreements, we receive fixed rates of interest and pay variable rates
of interest, based off of three-month LIBOR. See Note 4 for further information on our interest rate swaps.
Junior Subordinated Debt Securities
In 1998, Provident Financing Trust I (the trust), a 100 percent-owned finance subsidiary of Unum Group, 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.
Interest and Debt Expense
Interest paid on long-term and short-term debt and related securities during 2013, 2012, and 2011 was $144.6 million, $139.6 million,
and $145.4 million, respectively.
Credit Facility
In August 2013, we entered into a five-year, $400.0 million unsecured revolving credit facility. Under the terms of the agreement, we
may request that the credit facility be increased up to $600.0 million. Borrowings under the credit facility are for general corporate uses and
are subject to financial covenants, negative covenants, and events of default that are customary. The credit facility provides for interest
rates based on either the prime rate or LIBOR. At December 31, 2013, no amount was outstanding on the facility.
Note 9. Employee Benefit Plans
Defined Benefit Pension and Other Postretirement Benefit Plans
We sponsor several defined benefit pension and other postretirement benefit (OPEB) plans for our employees, including non-qualified
pension plans. The U.S. qualified and non-qualified defined benefit pension plans comprise the majority of our total benefit obligation and
benefit cost. We maintain a separate defined benefit plan for eligible employees in our U.K. operation. The U.S. defined benefit pension
plans were closed to new entrants on December 31, 2013, and the U.K. plan was closed to new entrants on December 31, 2002.