Junior Subordinated Debentures

12 Months Ended

Dec. 31, 2019

Through a series of trusts, that are wholly-owned subsidiaries (non-consolidated), we issued debt. The debentures are variable with the rate being reset quarterly and subject to certain interest rate ceilings. Interest payments are payable quarterly. The debentures are all unsecured and are subordinated to other indebtedness. At December 31, 2019 and 2018, all debentures were eligible for redemption subject to certain terms and conditions at a price equal to 100% of the principal plus accrued and unpaid interest.

A summary of our outstanding junior subordinated debentures is presented below:

December 31, 2019

(in millions)

Issue Date

Trust Preferred Pools

Maturity

Rate Structure

Interest Rate at
December 31, 2019

Amount

Argo Group

5/15/2003

PXRE Capital Statutory Trust II

5/15/2033

3M LIBOR + 4.10%

6.01%

18.1

11/6/2003

PXRE Capital Trust VI

9/30/2033

3M LIBOR + 3.90%

5.84%

10.3

Argo Group US

5/15/2003

Argonaut Group Statutory Trust I

5/15/2033

3M LIBOR + 4.10%

6.01%

15.5

12/16/2003

Argonaut Group Statutory Trust III

1/8/2034

3M LIBOR + 4.10%

6.09%

12.3

4/29/2004

Argonaut Group Statutory Trust IV

4/29/2034

3M LIBOR + 3.85%

5.76%

13.4

5/26/2004

Argonaut Group Statutory Trust V

5/24/2034

3M LIBOR + 3.85%

5.76%

12.3

5/12/2004

Argonaut Group Statutory Trust VI

5/12/2034

3M LIBOR + 3.80%

5.70%

13.4

9/17/2004

Argonaut Group Statutory Trust VII

12/15/2034

3M LIBOR + 3.60%

5.49%

15.5

9/22/2004

Argonaut Group Statutory Trust VIII

9/22/2034

3M LIBOR + 3.55%

5.48%

15.5

10/22/2004

Argonaut Group Statutory Trust IX

12/15/2034

3M LIBOR + 3.60%

5.49%

15.5

9/14/2005

Argonaut Group Statutory Trust X

9/15/2035

3M LIBOR + 3.40%

5.29%

30.9

Total Outstanding

172.7

December 31, 2018

(in millions)

Issue Date

Trust Preferred Pools

Maturity

Rate Structure

Interest Rate at
December 31, 2018

Amount

Argo Group

5/15/2003

PXRE Capital Statutory Trust II

5/15/2033

3M LIBOR + 4.10%

6.72%

18.1

11/6/2003

PXRE Capital Trust VI

9/30/2033

3M LIBOR + 3.90%

6.70%

10.3

Argo Group US

5/15/2003

Argonaut Group Statutory Trust I

5/15/2033

3M LIBOR + 4.10%

6.72%

15.5

12/16/2003

Argonaut Group Statutory Trust III

1/8/2034

3M LIBOR + 4.10%

6.54%

12.3

4/29/2004

Argonaut Group Statutory Trust IV

4/29/2034

3M LIBOR + 3.85%

6.47%

13.4

5/26/2004

Argonaut Group Statutory Trust V

5/24/2034

3M LIBOR + 3.85%

6.54%

12.3

5/12/2004

Argonaut Group Statutory Trust VI

5/12/2034

3M LIBOR + 3.80%

6.59%

13.4

9/17/2004

Argonaut Group Statutory Trust VII

12/15/2034

3M LIBOR + 3.60%

6.39%

15.5

9/22/2004

Argonaut Group Statutory Trust VIII

9/22/2034

3M LIBOR + 3.55%

6.37%

15.5

10/22/2004

Argonaut Group Statutory Trust IX

12/15/2034

3M LIBOR + 3.60%

6.39%

15.5

9/14/2005

Argonaut Group Statutory Trust X

9/15/2035

3M LIBOR + 3.40%

6.19%

30.9

Total Outstanding

172.7

Junior Subordinated Debentures from Maybrooke Acquisition

Unsecured junior subordinated debentures with a principal balance of $91.8 million were assumed through the acquisition of Maybrooke (“the acquired debt”). As part of the ongoing liquidation of the Maybrooke holding company, which began subsequent to our acquisition in 2018, the acquired debt was ultimately assigned to Argo Re and is carried on our consolidated balance sheet at $84.7 million, which represents the debt’s fair value at the date of acquisition plus accumulated accretion of discount to par value, as required by accounting for business combinations under ASC 805 . At December 31, 2019, the acquired debt was eligible for redemption at par. Interest accrues on the acquired debt based on a variable rate, which is reset quarterly. Interest payments are payable quarterly.

A summary of the terms of the acquired debt outstanding is presented below:

December 31, 2019

(in millions)

Issue Date

Maturity

Rate Structure

Interest Rate at
December 31, 2019

Principal at
December 31, 2019

Carrying Value at
December 31, 2019

9/15/2007

9/15/2037

3 month LIBOR + 3.15%

5.04

91.8

84.7

December 31, 2018

(in millions)

Issue Date

Maturity

Rate Structure

Interest Rate at
December 31, 2018

Principal at
December 31, 2018

Carrying Value at
December 31, 2018

9/15/2007

9/15/2037

3 month LIBOR + 3.15%

5.94

91.8

84.3