Voya 2014 Annual Report Download - page 294

Voya Financial, Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
Troubled Debt Restructuring
The Company invests in high quality, well performing portfolios of commercial mortgage loans and private
placements. Under certain circumstances, modifications are granted to these contracts. Each modification is
evaluated as to whether a troubled debt restructuring has occurred. A modification is a troubled debt restructuring
when the borrower is in financial difficulty and the creditor makes concessions. Generally, the types of
concessions may include reducing the face amount or maturity amount of the debt as originally stated, reducing
the contractual interest rate, extending the maturity date at an interest rate lower than current market interest rates
and/or reducing accrued interest. The Company considers the amount, timing and extent of the concession
granted in determining any impairment or changes in the specific valuation allowance recorded in connection
with the troubled debt restructuring. A valuation allowance may have been recorded prior to the quarter when the
loan is modified in a troubled debt restructuring. Accordingly, the carrying value (net of the specific valuation
allowance) before and after modification through a troubled debt restructuring may not change significantly, or
may increase, if the expected recovery is higher than the pre-modification recovery assessment. For the year
ended December 31, 2014, the Company had no new troubled debt restructurings for private placement and one
new troubled debt restructuring for commercial mortgage loans with a pre-modification and post modification
carrying value of $1.9. For the year ended December 31, 2013, the Company had no new troubled debt
restructurings for private placement and had 21 new troubled debt restructurings for commercial mortgage loans
with a pre-modification and post modification carrying value of $91.0. Of these 21 commercial mortgage loans,
20 comprise a portfolio of cross-defaulted, cross-collateralized individual loans, which are owned by the same
sponsor. Between the date of the troubled debt restructurings and December 31, 2014, these loans have repaid
$27.2 in principal.
As of December 31, 2014 and 2013, the Company did not have any commercial mortgage loans or private
placements modified in a troubled debt restructuring with a subsequent payment default.
Mortgage Loans on Real Estate
The Company’s mortgage loans on real estate are all commercial mortgage loans held for investment, which are
reported at amortized cost, less impairment write-downs and allowance for losses. The Company diversifies its
commercial mortgage loan portfolio by geographic region and property type to reduce concentration risk. The
Company manages risk when originating commercial mortgage loans by generally lending only up to 75% of the
estimated fair value of the underlying real estate. Subsequently, the Company continuously evaluates mortgage
loans based on relevant current information including a review of loan-specific credit quality, property
characteristics and market trends. Loan performance is monitored on a loan specific basis through the review of
submitted appraisals, operating statements, rent revenues and annual inspection reports, among other items. This
review ensures properties are performing at a consistent and acceptable level to secure the debt. The components
to evaluate debt service coverage are received and reviewed at least annually to determine the level of risk.
The following table summarizes the Company’s investment in mortgage loans as of the dates indicated:
December 31, 2014 December 31, 2013
Commercial mortgage loans ............ $9,796.9 $9,316.0
Collective valuation allowance .......... (2.8) (3.8)
Total net commercial mortgage loans ..... $9,794.1 $9,312.2
There were no impairments taken on the mortgage loan portfolio for the years ended December 31, 2014 and
2013.
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