Debt (Tables)

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Outstanding long-term debt

ProAssurance’s outstanding debt consisted of the following:

(In thousands)	December 31, 2019		December 31, 2018
Senior Notes due 2023, unsecured, interest at 5.3% annually	$	250,000	$	250,000
Mortgage Loans, outstanding borrowings are secured by first priority liens on two office buildings, and bear an interest rate of three-month LIBOR plus 1.325% (3.21% and 4.10%, respectively) determined on a quarterly basis.	37,617		39,064
Total principal	287,617		289,064
Less unamortized debt issuance costs	1,796		1,307
Debt less unamortized debt issuance costs	$	285,821	$	287,757

Schedule of debt maturities

11. Debt

ProAssurance’s outstanding debt consisted of the following:

(In thousands)	December 31, 2019		December 31, 2018
Senior Notes due 2023, unsecured, interest at 5.3% annually	$	250,000	$	250,000
Mortgage Loans, outstanding borrowings are secured by first priority liens on two office buildings, and bear an interest rate of three-month LIBOR plus 1.325% (3.21% and 4.10%, respectively) determined on a quarterly basis.	37,617		39,064
Total principal	287,617		289,064
Less unamortized debt issuance costs	1,796		1,307
Debt less unamortized debt issuance costs	$	285,821	$	287,757

Senior Notes due 2023 (the Senior Notes)

The Senior Notes are the unsecured obligations of ProAssurance Corporation, due in full in November 2023, unless redeemed sooner, with interest payable semiannually. Redemptions may be made prior to maturity, in whole or part, at the greater of par or the sum of the present values of the outstanding principal and remaining interest payments calculated at 0.4% above the then current rate for U.S. Treasury Notes with a term comparable to the remaining term of the Senior Notes. There are no financial covenants associated with the Senior Notes.

Mortgage Loans

During 2017, two of ProAssurance's subsidiaries each entered into ten-year mortgage loans collectively totaling $40.5 million (Mortgage Loans) with one lender in connection with the recapitalization of two office buildings. The Mortgage Loans, which mature in December 2027, accrue interest at three-month LIBOR plus 1.325% with principal and interest payable on a quarterly basis. To manage the Company's exposure to increases in LIBOR on the Mortgage Loans, ProAssurance entered into an interest rate cap agreement with a notional amount of $35 million. Per the interest rate cap agreement, the Company is entitled to receive cash payments if and when the three-month LIBOR exceeds 2.35%. Additional information on the Company's derivative instruments is provided in Note 12.

The Mortgage Loans contain customary representations, covenants and events constituting default, and remedies for default. Additionally, the Mortgage Loans carry the following financial covenant:

(1) Each of the two ProAssurance subsidiaries are not permitted to have a leverage ratio of Consolidated Funded Debt (principally, obligations for borrowed money, obligations for deferred purchase price of property or services, obligations evidenced by notes, bonds, debentures, standby and commercial Letters of Credit and contingent obligations of the subsidiary) to Consolidated Total Capitalization (principally, SAP Consolidated Net Worth plus Consolidated Funded Debt of the subsidiary) greater than 0.35, determined at the end of each fiscal quarter.

At December 31, 2019, contractual maturities of the Mortgages Loans for each of the next five years, excluding interest payments, are as follows:

(In thousands)	Principal Payments Due by Period
2020	$	1,503
2021	1,559
2022	1,617
2023	1,677
2024	1,740
Thereafter	29,521
Total principal payments	$	37,617