DEBT AND OTHER OBLIGATIONS

9 Months Ended

Sep. 30, 2020

Under a revolving line of credit arrangement (the “Credit Facility”), the Company has the ability to borrow on an unsecured basis up to an aggregate principal amount of $1.0 billion. The Company has the right in certain circumstances to request that the commitment under the Credit Facility be increased up to a maximum principal amount of $1.5 billion. Balances outstanding under the Credit Facility accrue interest at a rate equal to, at the option of the Borrowers, (i) LIBOR plus a spread based on the ratings of PLC’s Senior Debt, or (ii) the sum of (A) a rate equal to the highest of (x) the Administrative Agent’s Prime rate, (y) 0.50% above the Funds Rate, or (z) the one-month LIBOR plus 1.00% and (B) a spread based on the ratings of PLC’s Senior Debt. The Credit Facility also provided for a facility fee at a rate that varies with the ratings of PLC’s Senior Debt and that is calculated on the aggregate amount of commitments under the Credit Facility, whether used or unused. The annual facility fee rate is 0.125% of the aggregate principal amount. The Credit Facility provides that PLC is liable for the full amount of any obligations for borrowings or letters of credit, including those of the Company, under the Credit Facility. The maturity date of the Credit Facility is May 3, 2023. The Company is not aware of any non-compliance with the financial debt covenants of the Credit Facility as of September 30, 2020. PLC had a combined outstanding balance of $255.0 million, with $215.0 million bearing an interest at a rate of LIBOR plus 1.00%, and $40 million bearing an interest rate of Prime as of September 30, 2020. PLC did not have an outstanding balance as of December 31, 2019.

Non-Recourse Funding Obligations

Non-recourse funding obligations outstanding as of September 30, 2020, on a consolidated basis, are shown in the following table. See Note 15, Subsequent Events for additional information on the Company’s non-recourse funding obligations.


Issuer	Outstanding Principal		Carrying Value(1)		Maturity Year	Year-to-Date Weighted-Avg Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	1,858,000	$	1,858,000	2039	4.70	%
Golden Gate II Captive Insurance Company	329,949		275,895		2052	3.91	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	750,000		806,015		2037	5.12	%
MONY Life Insurance Company(3)	1,885		2,216		2024	6.19	%
Total	$	2,939,834	$	2,942,126

(1) Carrying values include premiums and discounts and do not represent unpaid principal balances.
(2) Obligations are issued to non-consolidated subsidiaries of PLC. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of the Company. Changes in Golden Gate and Golden Gate V are non-cash items.
(3) Fixed rate obligations.

Non-recourse funding obligations outstanding as of December 31, 2019, on a consolidated basis, are shown in the following table:


Issuer	Outstanding Principal		Carrying Value(1)		Maturity Year	Year-to-Date Weighted-Avg Interest Rate
	(Dollars In Thousands)
Golden Gate Captive Insurance Company(2)(3)	$	2,028,000	$	2,028,000	2039	4.70	%
Golden Gate II Captive Insurance Company	329,949		274,955		2052	5.06	%
Golden Gate V Vermont Captive Insurance Company(2)(3)	720,000		777,527		2037	5.12	%
MONY Life Insurance Company(3)	1,885		2,271		2024	6.19	%
Total	$	3,079,834	$	3,082,753

(1) Carrying values include premiums and discounts and do not represent unpaid principal balances.
(2) Obligations are issued to non-consolidated subsidiaries of PLC. These obligations collateralize certain held-to-maturity securities issued by wholly owned subsidiaries of the Company. Changes in Golden Gate and Golden Gate V are non-cash items.
(3) Fixed rate obligations.

Secured Financing Transactions

Repurchase Program Borrowings

While the Company anticipates that the cash flows of its operating subsidiaries will be sufficient to meet its investment commitments and operating cash needs in a normal credit market environment, the Company recognizes that investment commitments scheduled to be funded may, from time to time, exceed the funds then available. Therefore, the Company has established repurchase agreement programs for certain of its insurance subsidiaries to provide liquidity when needed. The Company expects that the rate received on its investments will equal or exceed its borrowing rate. Under this program, the Company may, from time to time, sell an investment security at a specific price and agree to repurchase that security at another specified price at a later date. These borrowings are typically for a term less than 90 days. The market value of securities to be repurchased is monitored and collateral levels are adjusted where appropriate to protect the counterparty against credit exposure. Cash received is invested in fixed maturity securities, and the agreements provide for net settlement in the event of default or on termination of the agreements. As of September 30, 2020, the fair value of securities pledged under the repurchase program was $153.7 million, and the repurchase obligation of $150.0 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 14 basis points). During the nine months ended September 30, 2020, the maximum balance outstanding at any one point in time related to these programs was $565.0 million. The average daily balance was $94.4 million (at an average borrowing rate of 50 basis points) during the nine months ended September 30, 2020. As of December 31, 2019, the fair value of securities pledged under the repurchase program was $282.2 million, and the repurchase obligation of $270.0 million was included in the Company’s consolidated condensed balance sheets (at an average borrowing rate of 163 basis points). During 2019, the maximum balance outstanding at any one point in time related to these programs was $900.0 million. The average daily balance was $212.2 million (at an average borrowing rate of 214 basis points) during the year ended December 31, 2019.

Securities Lending

The Company participates in securities lending, primarily as an investment yield enhancement, whereby securities that are held as investments are loaned out to third parties for short periods of time. The Company requires collateral at least equal to 102% of the fair value of the loaned securities to be separately maintained. The loaned securities’ fair value is monitored on a daily basis and collateral is adjusted accordingly. The Company maintains ownership of the securities at all times and is entitled to receive from the borrower any payments for interest received on such securities during the loan term. Securities lending transactions are accounted for as secured borrowings. As of September 30, 2020, securities with a fair value of $80.2 million were loaned under this program. As collateral for the loaned securities, the Company receives cash which is primarily reinvested in short-term repurchase agreements, which are also collateralized by U.S. Government or U.S. Government Agency securities, and government money market funds. These investments are recorded in short-term investments with a corresponding liability recorded in secured financing liabilities to account for its obligation to return the collateral. As of September 30, 2020, the fair value of the collateral related to this program was $82.8 million and the Company has an obligation to return $82.8 million of collateral to the securities borrowers.

The following table provides the fair value of collateral pledged for repurchase agreements, grouped by asset class as of September 30, 2020 and December 31, 2019:

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings


	Remaining Contractual Maturity of the Agreements
	As of September 30, 2020
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	153,681	$	—	$	—	$	—	$	153,681






Total repurchase agreements and repurchase-to-maturity transactions	153,681		—		—		—		153,681
Securities lending transactions



Corporate securities	60,358		—		—		—		60,358
Equity securities	17,282		—		—		—		17,282

Other government related securities	2,554		—		—		—		2,554

Total securities lending transactions	80,194		—		—		—		80,194
Total securities	$	233,875	$	—	$	—	$	—	$	233,875

Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions

Accounted for as Secured Borrowings


	Remaining Contractual Maturity of the Agreements
	As of December 31, 2019
	(Dollars In Thousands)
	Overnight and Continuous		Up to 30 days		30-90 days		Greater Than 90 days		Total
Repurchase agreements and repurchase-to-maturity transactions
U.S. Treasury and agency securities	$	282,198	$	—	$	—	$	—	$	282,198






Total repurchase agreements and repurchase-to-maturity transactions	282,198		—		—		—		282,198
Securities lending transactions



Fixed maturity securities	55,720		—		—		—		55,720
Equity securities	7,120		—		—		—		7,120



Total securities lending transactions	62,840		—		—		—		62,840
Total securities	$	345,038	$	—	$	—	$	—	$	345,038