Long-term Debt

12 Months Ended

Dec. 31, 2024

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt

The Company recorded its debt at its fair value as of November 16, 2023 due to push-down accounting which included a discount to the total principal amount. The discount is being amortized to Interest expense in our Consolidated Statements of Income (Loss) using the effective yield method over the remaining period of the underlying debt obligations.

Senior Unsecured Fixed Rate Notes

In September 2012, Argo Group (the “Parent Guarantor”), through its subsidiary Argo Group U.S. (the “Subsidiary Issuer”), issued $143.8 million aggregate principal amount of the Subsidiary Issuer’s 6.5% Senior Notes due September 15, 2042 (the “Notes”). The Notes are unsecured and unsubordinated obligations of the Subsidiary Issuer and rank equally in right of payment with all of the Subsidiary Issuer’s other unsecured and unsubordinated debt. The Notes are guaranteed on a full and unconditional senior unsecured basis by the Parent Guarantor. The Notes may be redeemed, for cash, in whole or in part, on or after September 15, 2017, at the Subsidiary Issuer’s option, at any time and from time to time, prior to maturity at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued but unpaid interest on the principal amount being redeemed to, but not including, the redemption date.

In accordance with ASC 835, we present the unamortized debt issuance costs in the balance sheet as a direct deduction from the carrying value of the debt liability. At December 31, 2024 and 2023, the Notes consisted of the following:

(in millions)	December 31, 2024		December 31, 2023
Senior unsecured fixed rate notes
Principal	$	143.8	$	143.8
Less: unamortized debt issuance costs and fair value adjustment	(15.0)		(15.8)
Senior unsecured fixed rate notes, less unamortized debt issuance costs	$	128.8	$	128.0

Junior Subordinated Debentures

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, 2024 and 2023, 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, 2024

(in millions)
Issue Date	Trust Preferred Pools	Maturity	Rate Structure	Interest Rate at December 31, 2024	Amount
Argo Group
5/15/2003	PXRE Capital Statutory Trust II	5/15/2033	3M SOFR + TSA + 4.10%	8.89%	$	18.0
11/6/2003	PXRE Capital Trust VI	9/30/2033	3M SOFR + TSA + 3.90%	8.49%	10.3
Argo Group U.S.
5/15/2003	Argonaut Group Statutory Trust I	5/15/2033	3M SOFR + TSA + 4.10%	8.89%	15.5
12/16/2003	Argonaut Group Statutory Trust III	1/8/2034	3M SOFR + TSA + 4.10%	9.02%	12.3
4/29/2004	Argonaut Group Statutory Trust IV	4/29/2034	3M SOFR + TSA + 3.85%	8.64%	13.4
5/26/2004	Argonaut Group Statutory Trust V	5/24/2034	3M SOFR + TSA + 3.85%	8.63%	12.4
5/12/2004	Argonaut Group Statutory Trust VI	6/17/2034	3M SOFR + TSA + 3.80%	8.41%	13.4
9/17/2004	Argonaut Group Statutory Trust VII	12/15/2034	3M SOFR + TSA + 3.60%	8.22%	15.5
9/22/2004	Argonaut Group Statutory Trust VIII	9/22/2034	3M SOFR + TSA + 3.55%	8.15%	15.5
10/22/2004	Argonaut Group Statutory Trust IX	12/15/2034	3M SOFR + TSA + 3.60%	8.22%	15.5
9/15/2005	Argonaut Group Statutory Trust X	9/15/2035	3M SOFR + TSA + 3.40%	8.02%	30.9
	Less: fair value adjustment				(10.7)
	Total Outstanding				$	162.0

December 31, 2023

(in millions)
Issue Date	Trust Preferred Pools	Maturity	Rate Structure	Interest Rate at December 31, 2023	Amount
Argo Group
5/15/2003	PXRE Capital Statutory Trust II	5/15/2033	3M SOFR + TSA + 4.10%	9.74%	$	18.0
11/6/2003	PXRE Capital Trust VI	9/30/2033	3M SOFR + TSA + 3.90%	9.49%	10.3
Argo Group U.S.
5/15/2003	Argonaut Group Statutory Trust I	5/15/2033	3M SOFR + TSA + 4.10%	9.74%	15.5
12/16/2003	Argonaut Group Statutory Trust III	1/8/2034	3M SOFR + TSA + 4.10%	9.76%	12.3
4/29/2004	Argonaut Group Statutory Trust IV	4/29/2034	3M SOFR + TSA + 3.85%	9.49%	13.4
5/26/2004	Argonaut Group Statutory Trust V	5/24/2034	3M SOFR + TSA + 3.85%	9.49%	12.4
5/12/2004	Argonaut Group Statutory Trust VI	6/17/2034	3M SOFR + TSA + 3.80%	9.47%	13.4
9/17/2004	Argonaut Group Statutory Trust VII	12/15/2034	3M SOFR + TSA + 3.60%	9.25%	15.5
9/22/2004	Argonaut Group Statutory Trust VIII	9/22/2034	3M SOFR + TSA + 3.55%	9.18%	15.5
10/22/2004	Argonaut Group Statutory Trust IX	12/15/2034	3M SOFR + TSA + 3.60%	9.25%	15.5
9/15/2005	Argonaut Group Statutory Trust X	9/15/2035	3M SOFR + TSA + 3.40%	9.05%	30.9
	Less: fair value adjustment				(11.9)
	Total Outstanding				$	160.8

Unsecured junior subordinated debentures with a principal balance of $91.8 million were assumed through a previous business acquisition. The acquired debt is carried on our Consolidated Balance Sheets at $81.2 million, which represents the debt’s fair value as of November 16, 2023 as required by accounting for business combinations under ASC 805. At December 31, 2024, 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:

(in millions)
Issue Date	Maturity	Rate Structure	Interest Rate at December 31, 2024		Principal at December 31, 2024		Carrying Value at December 31, 2024
9/13/2007	9/15/2037	3M SOFR + TSA + 3.15%	7.77	%	$	91.8	$	81.2

(in millions)
Issue Date	Maturity	Rate Structure	Interest Rate at December 31, 2023		Principal at December 31, 2023		Carrying Value at December 31, 2023
9/13/2007	9/15/2037	3M SOFR + TSA + 3.15%	8.79	%	$	91.8	$	80.4

Other Indebtedness

The following table presents interest and maturities of long-term debt as of December 31, 2024:

		For the Years Ended
(in millions)	Total	2025	2026	2027	2028	2029	Thereafter
Long-term debt:
Junior subordinated debentures (1)	504.9	22.8	22.8	22.8	22.8	22.8	390.9
Senior unsecured fixed rate notes (2)	307.2	9.3	9.3	9.3	9.3	9.3	260.7

(1) Interest only on Junior Subordinated Debentures through 2037. Interest calculated based on interest rate forecast. Principal due beginning May 2033.

(2) Interest only on Senior Unsecured Fixed Rate Notes through 2042. Interest calculated based on the fixed rate of the notes. Principal due September 2042.

Revolving Credit Facility

On November 2, 2018, each of Argo Group, Argo Group U.S., Argo International Holdings Limited, and AUA, collectively (the “Borrowers”) entered into a new $325 million credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent. The Credit Agreement includes a one-time borrowing of $125 million for a term loan (the “Term Loan”), and a $200 million revolving credit facility. The Company used most of the net proceeds from the Preferred Stock Offering (as defined in Note 10, “Stockholders’ Equity”) to pay off the Term Loan in September 2020. The Credit Agreement was subsequently amended to increase the revolving credit facility amount to $220 million, and to provide the removal of AIH and AUA as Borrowers upon the sale of AIH and AUA, which occurred on February 2, 2023.

During July 2023, the Credit Agreement was amended to permit the acquisition of Argo Group by Brookfield Wealth Solutions Ltd. pursuant to the Merger Agreement and extend the maturity date of certain commitments under the revolving credit facility from November 2, 2023 to November 2, 2024. The Credit Agreement decreased from $220 million to $200 million effective November 2, 2023.

On February 21, 2024, the Company entered into Amendment No. 6 (“Amendment No. 6”) of the Credit Agreement with the financial institutions party thereto as lenders and JPMorgan Chase Bank, N.A., individually as a lender and as administrative agent (the “Credit Agreement”). Amendment No. 6, among other things, replaced the minimum Tangible Net Worth covenant in the Credit Agreement with a minimum Consolidated Net Worth. The Consolidated Net Worth covenant is tested at the end of each fiscal quarter and has been set at an amount equal to the sum of (i) $872.0 million plus (ii) 50% of positive net income for each fiscal quarter ending after December 31, 2023 plus (iii) 50% of net proceeds received from the issuance and sale of certain equity interests after December 31, 2023.

On February 22, 2024, the Company borrowed $100.0 million from the revolving credit facility and elected a one-month term and interest option, under the terms of the Credit Agreement. The loan had been renewed using the one-month option until May 29, 2024, when the Company repaid the $100.0 million borrowed under the revolving credit facility. The facility was subsequently terminated on June 4, 2024. On June 4, 2024, the Company was named as a party under Brookfield Wealth Solutions Ltd.’s $1.2 billion revolving credit facility.

Letter of Credit Facilities - Argo Re

Argo Re may be required to secure its obligations under various reinsurance contracts in certain circumstances. In order to satisfy these requirements, Argo Re has entered into one committed and one uncommitted secured bilateral LOC facility with commercial banks and generally uses these facilities to issue LOC’s in support of non-admitted reinsurance obligations in the U.S. and other jurisdictions. The committed letters of credit facility has a term of one year and includes customary conditions and event of default provisions. The issuance of LOC’s using the uncommitted LOC facility is at the discretion of the lenders. The availability of letters of credit under these secured facilities are subject to a borrowing base requirement, determined on the basis of specified percentages of the market value of eligible categories of securities pledged to the lender. On December 31, 2024, committed and uncommitted LOC facilities totaled $110.0 million.

On December 31, 2024, letters of credit totaling $31.2 million were outstanding, of which $19.4 million were issued against the committed, secured bilateral LOC facility and $11.9 million were issued against the uncommitted, secured bilateral LOC facility. Collateral with a market value of $40.1 million was pledged to these banks as security against these LOC’s.

In addition to the bilateral, secured LOC facility described above, Argo Re can use other forms of collateral to secure these reinsurance obligations including trust accounts, cash deposits, and LOC’s issued by commercial banks on an uncommitted basis.

Other Letters of Credit

Other letters of credit issued and outstanding at December 31, 2024 were $4.1 million.