Voya 2013 Annual Report Download - page 472

account to support its reinsurance obligation to ING USA related to variable annuity cessions from ING USA to
SLDI. Following the deposit by SLDI of the contributed capital into the funds withheld trust account, the $1.5
billion contingent capital LOCs issued under the contingent capital LOC facility were cancelled and, on May 14,
2013, the $1.5 billion contingent capital LOC facility was terminated.
In September 2008, SLDI entered into a bi-lateral LOC facility with ING Bank in the amount of $825.0
million. This LOC facility is used to support the borrowing of securities from ING Bank that were used by the
Master Trust as collateral for the reinsurance of business written by Security Life of Denver (SLD), another
wholly-owned subsidiary of ours. We provided a limited guarantee in favor of ING Bank on the return of
securities to the extent that SLD drew on the collateral while receiving reinsurance payments when contractually
due. Effective October 30, 2013, this facility and the outstanding LOCs thereunder were consolidated with the
July 2011 facility described above into a single $1.125 billion LOC facility (described below). As a result of the
October 31, 2013 transaction, the Master Trust returned the securities and the guarantee provided by the
Company was extinguished.
Intercompany Loans
In 2007, the Company entered into a $500.0 million par floating rate loan agreement with ING V under
which the Company paid a variable rate of interest based on the three month LIBOR. As of May 31, 2013, the
Company paid off $350 million of this loan and, on July 5, 2013, the Company paid off all remaining borrowings
on this loan.
As of December 31, 2013, LOCs issued by ING Bank under the Revolving Credit Agreement were $150.3
million. As part of its participation in the Senior Unsecured Credit Facility described above, ING Bank funded
$35.7 million of the total $500.0 million direct borrowings drawn from the Term Loan Agreement portion of the
facility. In July 2012, all direct borrowing under the Term Loan Agreement were repaid and no direct borrowings
remain thereunder.
Securities Offerings
ING Financial Markets LLC (“ING Financial Markets”), a non-subsidiary affiliate of Voya Financial, Inc.,
served as a Joint Book Running Manager or as a Senior Co-Manager for three offerings of debt securities made
by the Company during 2013, and received an aggregate of $0.5 million for its services, on terms no more
favorable than those received by any of the non-affiliated bookrunners or co-managers.
ING Financial Markets was one of the participating underwriters of our initial public offering and follow-on
offering and received $1.3 million and $0.5 million, respectively, in commission from the Company, on terms no
more favorable than those received by any of the non-affiliated underwriters.
Derivative and Swap Agreements
The Company is or has been party to several derivative contracts with NN Group and ING Bank and one or
more of ING Bank’s subsidiaries. Each of the transactions entered into pursuant to these contracts was entered
into as a result of a competitive bid, which included unaffiliated counterparties. The Company is exposed to
various risks relating to its ongoing business operations, including but not limited to interest rate risk, foreign
currency risk, and equity market risk. To manage these risks, the Company uses various strategies, including
derivatives contracts, certain of which are with related parties, including interest rate swaps, equity options and
currency forwards.
As of December 31, 2013, the outstanding notional amount of derivative contracts with NN Group, ING
Bank and one or more of ING Bank’s subsidiaries were approximately $518.9 million (consisting of interest rate
swaps of $328.8 million and equity options of $190.1 million).
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