Voya 2013 Annual Report Download - page 357

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Funding Agreements
On April 9, 2009, the Company sold a funding agreement in the amount of $600.0 to the Columbine Funding
Trust (“CFT”), a special purpose Delaware business trust. CFT, in turn, issued a trust note to ING Bank, an
affiliate, which was collateralized by the cash flows from the funding agreement and otherwise matches the terms
of the funding agreement. The Company is not a party to the trust note. The funding agreement was scheduled to
mature in April 2012, however it was terminated on May 18, 2011 with an early termination fee paid to ING
Bank of $8.6. The interest expense related to the funding agreement was $7.5 for the year ended December 31,
2011.
Back-up Facility
On January 26 2009, ING, for itself and on behalf of certain subsidiaries, including the Company, reached an
agreement with the Dutch State on an Illiquid Asset Back-up Facility (the “Alt-A Back-up Facility”) regarding
Alt-A RMBS owned by certain subsidiaries, including the Company. Pursuant to this transaction, the Company
transferred all risks and rewards on 80% of a $4.5 billion par Alt-A RMBS portfolio to ING Support Holding
B.V., a wholly owned subsidiary of ING Group (“ING Support Holding”) by means of the granting of a
participation interest to ING Support Holding. ING and ING Support Holding entered into a back-to-back
arrangement with the Dutch State on this 80%. As a result of this transaction, the Company retained 20% of the
exposure for any results on the $4.5 billion Alt-A RMBS portfolio.
The purchase price for the participation payable by the Dutch State was set at 90% of the par value of the
80% interest in the securities as of that date. This purchase price was payable in installments, was recognized as a
loan granted to the Dutch State with a value of $3.3 billion, and was recorded as Loan-Dutch State Obligation on
the Consolidated Balance Sheets (the “Dutch State Obligation”). Under the transaction, other fees were payable
by both the Company and the Dutch State.
On November 13, 2012, ING, ING Support Holding, ING Bank, and the Company entered into restructuring
arrangements with the Dutch State, which closed the following day (the “Termination Agreement”). Pursuant to
the restructuring transaction, the Company sold the Dutch State Obligation to ING Support Holding at fair value
and transferred legal title to 80% of the securities subject to the Alt-A Back-up Facility to ING Bank. The
restructuring resulted in an immaterial pre-tax loss. Following the restructuring transaction, the Company
continued to own 20% of the Alt-A RMBS from the transaction and had the right to sell these securities, subject
to a right of first refusal granted to ING Bank.
The Company incurred no net fees for the year ended December 31, 2013. The Company incurred net fees of
$6.1 and $8.3 for the years ended December 31, 2012 and 2011, respectively.
Asset Management Arrangements
Prior to the Termination Agreement, IIM managed the underlying assets and provided services related to the
Company’s securities subject to the Alt-A Back-up Facility pursuant to services agreements with each of the
participating subsidiaries.
ING, ING Bank and ING Direct U.S., as part of ING’s divestiture of ING Direct U.S., entered into an agreement
with the Dutch State similar to the Termination Agreement with respect to the Alt-A RMBS owned by ING
Direct U.S. (the “ING Direct Restructuring”). As part of the ING Direct Restructuring, in February 2012, IIM
entered into an agreement (the “Alt-A Asset Management Agreement”) with ING Bank pursuant to which it
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