Voya 2013 Annual Report Download - page 175

grade bonds owned by us are the source of noncash collateral posted, which is reported in Securities pledged on
the Consolidated Balance Sheets. As of December 31, 2013, we held $214.7 million and $18.8 million of net
cash collateral related to OTC derivative contracts and cleared derivative contracts, respectively. As of
December 31, 2012, we held $890.3 million of net cash collateral related to OTC derivative contracts. In
addition, as of December 31, 2013 and December 31, 2012, we delivered securities as collateral of $1.0 billion.
Ratings
Our access to funding and our related cost of borrowing, requirements for derivatives collateral posting and
the attractiveness of certain of our products to customers are affected by our credit ratings and insurance financial
strength ratings, which are periodically reviewed by the rating agencies. Financial strength ratings and credit
ratings are important factors affecting public confidence in an insurer and its competitive position in marketing
products. The credit ratings are also important for the ability to raise capital through the issuance of debt and for
the cost of such financing.
A downgrade in our credit ratings or the credit or financial strength ratings of our rated subsidiaries could
potentially, among other things, limit our ability to market products, reduce our competitiveness, increase the
number or value of policy surrenders and withdrawals, increase our borrowing costs and potentially make it more
difficult to borrow funds, adversely affect the availability of financial guarantees or LOCs, cause additional
collateral requirements or other required payments under certain agreements, allow counterparties to terminate
derivative agreements and/or hurt our relationships with creditors, distributors or trading counterparties thereby
potentially negatively affecting our profitability, liquidity and/or capital. In addition, we consider
nonperformance risk in determining the fair value of our liabilities. Therefore, changes in our credit or financial
strength ratings may affect the fair value of our liabilities.
Additionally, ratings of certain of our securities guaranteed by our majority shareholder, ING Group, could
be influenced by ING Group’s ratings. A downgrade of the credit ratings of ING Group could result in
downgrades of these securities.
Financial strength ratings represent the opinions of rating agencies regarding the financial ability of an
insurance company to meet its obligations under an insurance policy. Credit ratings represent the opinions of
rating agencies regarding an entity’s ability to repay its indebtedness. These ratings are not a recommendation to
buy or hold any of our securities and they may be revised or revoked at any time at the sole discretion of the
rating organization.
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