Voya 2013 Annual Report Download - page 346

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Surplus Notes
On November 1, 2007, Whisperingwind II, LLC (“Whisperingwind II”), an indirect wholly owned subsidiary of the
Company, entered into a Variable Funding Surplus Note Purchase Agreement (the “WWII Purchase Agreement”)
with Structured Asset Repackaged Trust II, 2005-B (the “STARTS Trust”), a Delaware statutory business trust
organized by HSBC Securities (USA), Inc. (“HSBC”), as part of an insurance securitization transaction. Under the
WWII Purchase Agreement, Whisperingwind II is provided opportunity for issuance and sale, and for the STARTS
Trust to purchase one or more floating rate variable funding surplus notes (“WWII Note”).
On December 31, 2012, the Company executed a binding letter of intent with a third-party reinsurer on behalf of
RLI and Whisperingwind II, its indirect wholly owned subsidiaries, to enter into a novation and recapture
agreement related to an existing insurance securitization transaction. As a result, the carrying value of the WWII
Note of $359.3 was repaid on January 3, 2013 and recorded as current debt in the December 31, 2012 financial
statements. The WWII Note bears interest at a variable rate equal to LIBOR plus periodic adjustments as defined
by the WWII Purchase Agreement. There was no interest paid for the year ended December 31, 2013. Interest
paid for the years ended December 31, 2012 and 2011 was $4.1.and $3.1, respectively.
On June 29, 2007, Whisperingwind III, LLC (Whisperingwind III”), an indirect wholly owned subsidiary of the
Company, entered into a Variable Funding Surplus Note Purchase Agreement (the “WWIII Purchase
Agreement”) with Structured Asset Repackaged Trust II, 2007-ING WWIII (the “WWIII STARTS Trust”), a
Delaware statutory business trust organized by HSBC, as part of an insurance securitization transaction. Under
the WWIII Purchase Agreement, Whisperingwind III is provided opportunity for issuance and sale, and for the
WWIII STARTS Trust to purchase one or more floating rate variable funding surplus notes (the “WWIII Note”)
up to an aggregate principal commitment amount of $498.8 with an available commitment period extending
through June 30, 2037. There were no amounts outstanding on the WWIII Note at December 31, 2013. The
carrying value and par value of the WWIII Note at December 31, 2012 was $329.1. The WWIII Note bears
interest at a variable rate equal to the LIBOR plus periodic adjustments as defined by the WWIII Purchase
Agreement. Principal and interest repayments cannot be made without prior written approval (or written
confirmation of non-disapproval) of the South Carolina Director of Insurance. In anticipation of receiving
regulatory approval to redeem the WWIII Note, and upon the agreement of the ceding insurer, WWIII replaced
the surplus note with LOCs totaling $305.0. Upon receiving regulatory approval, on April 19, 2013 WWIII
executed a Redemption and Cancellation Agreement with WWIII STARTS Trust to redeem the WWIII Note in
full. The carrying amount of the WWIII Note, $329.1, was paid in full on April 19, 2013, and was cancelled.
Interest paid for the years ended December 31, 2013, 2012 and 2011 was $1.0, $3.7 and $3.0, respectively.
Effective January 1, 2014, the reinsurance agreements were novated from WWIII to Roaring River IV, LLC
(“Roaring River IV”), a wholly owned reinsurance subsidiary of the Company. The LOCs were cancelled and
replaced with trust notes provided under a reimbursement agreement with a third-party bank.
Windsor Property Loan
On June 16, 2007, the State of Connecticut acting on behalf of the Department of Economic and Community
Development (“DECD”) loaned ILIAC $9.9 (the “DECD Loan”) in connection with the development of a
corporate office facility located at One Orange Way, Windsor, Connecticut (the “Windsor Property”). The loan
has a term of twenty years and bears an annual interest rate of 1.00%. As long as no defaults have occurred under
the loan, no payments of principal or interest are due for the initial ten years of the loan. For the second ten years
of the DECD Loan term, ILIAC is obligated to make monthly payments of principal and interest.
The DECD Loan provided for loan forgiveness during the first five years of the term at varying amounts up to
$5.0 if ILIAC and its affiliates met certain employment thresholds at the Windsor Property during that period. On
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