Unum 2013 Annual Report Download - page 75

UNUM 2013 ANNUAL REPORT / 73
We have estimated our future funding requirements under the Pension Protection Act of 2006 and under applicable U.K. law,
considering the effects of the retirement benefit changes described herein, and do not believe that any future funding requirements
will cause a material adverse effect on our liquidity. See Note 9 of the “Notes to Consolidated Financial Statements” contained herein
for further discussion of our employee benefit plans.
Debt
At December 31, 2013, we had short-term debt of $76.5 million, consisting entirely of securities lending agreements, and long-term
debt of $2,612.0 million, consisting primarily of senior secured notes and junior subordinated debt securities.
There are no significant financial covenants associated with any of our outstanding debt obligations. We continually monitor our
compliance with our debt covenants and remain in compliance. We have not observed any current trends that would cause a breach
of any debt covenants.
Purchases and Retirement of Debt
In January 2013, we purchased and retired the outstanding principal of $62.5 million on the floating rate, senior secured non-recourse
notes issued by Tailwind Holdings, resulting in a before-tax gain of $4.0 million. During 2012 and 2011, Tailwind Holdings made principal
payments of $10.0 million each year.
Northwind Holdings made principal payments on its floating rate, senior secured notes of $60.0 million in both 2013 and 2012 and
$74.4 million in 2011.
In 2011, we made debt repayments of $225.1 million at the maturity date of our remaining 7.625% senior notes due March 2011.
Issuance of Debt
In August 2012, we issued $250.0 million of unsecured senior notes in a public offering. These notes, due 2042, bear interest at a
fixed rate of 5.75% and are payable semi-annually. The notes are callable at or above par and rank equally in right of payment with all
of our other unsecured and unsubordinated debt. The balance outstanding on these notes was $250.0 million at December 31, 2013.
In 2010, we issued $400.0 million of unsecured senior notes in a public offering. These notes, due in 2020, bear interest at a fixed
rate of 5.625% and are payable semi-annually. The notes are callable at or above par and rank equally in right of payment with all of our
other unsecured and unsubordinated debt. In addition, these notes are effectively subordinated to any indebtedness of our subsidiaries.
The balance outstanding on these notes was $400.0 million at December 31, 2013.
In 2009, we issued $350.0 million of unsecured senior notes in a public offering. These notes, due in 2016, bear interest at a fixed rate
of 7.125% and are payable semi-annually. The notes are callable at or above par and rank equally in right of payment with all of our other
unsecured and unsubordinated debt. The balance outstanding on these notes was $350.0 million at December 31, 2013.
In 2007, Northwind Holdings issued $800.0 million floating rate, insured, senior, secured notes, due 2037, in a private offering.
Recourse for the payment of principal, interest, and other amounts due on the notes will be limited to the collateral for the notes and other
assets of Northwind Holdings, consisting primarily of the stock of its sole subsidiary Northwind Re. Northwind Holdings’ ability to meet its
payment obligations under the notes will be dependent principally upon its receipt of dividends from Northwind Re. The ability of
Northwind Re to pay dividends to Northwind Holdings will depend on its satisfaction of applicable regulatory requirements and on the
performance of the reinsured claims of Provident, Paul Revere and Unum America (the ceding insurers) reinsured by Northwind Re.
None of Unum Group, the ceding insurers, Northwind Re or any other affiliate of Northwind Holdings is an obligor or guarantor with
respect to the notes. The balance outstanding on these notes was $440.0 million at December 31, 2013.
In 2006, Tailwind Holdings issued $130.0 million floating rate, insured, senior, secured notes, due 2036, in a private offering. Recourse
for the payment of principal, interest, and other amounts due on the notes was limited to the collateral for the notes and the other assets of
Tailwind Holdings, consisting primarily of the stock of its sole subsidiary Tailwind Re. These notes were purchased and retired in January 2013.