Debt

12 Months Ended

Dec. 31, 2019

Debt consists of the following:


			December 31
			2019		2018
	Interest Rates	Maturities	(in millions of dollars)
Long-term Debt
Outstanding Principal
Senior Secured Notes issued 2007	Variable	2037	$	80.0	$	140.0
Senior Notes issued 1998	6.750 - 7.250%	2028	335.8		365.8
Senior Notes issued 2002	7.375%	2032	39.5		39.5
Senior Notes issued 2010	5.625%	2020	—		400.0
Senior Notes issued 2012 and 2016	5.750%	2042	500.0		500.0
Senior Notes issued 2014	4.000%	2024	350.0		350.0
Senior Notes issued 2015	3.875%	2025	275.0		275.0
Senior Notes issued 2016	3.000%	2021	—		350.0
Senior Notes issued 2019	4.000%	2029	400.0		—
Senior Notes issued 2019	4.500%	2049	450.0		—
Medium-term Notes issued 1990 - 1996	7.000 - 7.190%	2023 - 2028	20.5		50.8
Junior Subordinated Debt Securities issued 1998	7.405%	2038	203.7		226.5
Junior Subordinated Debt Securities issued 2018	6.250%	2058	300.0		300.0
Fair Value Hedge Adjustment			(0.6)		(5.1)
Less:
Unamortized Net Premium			8.4		9.6
Unamortized Debt Issuance Costs			(35.4)		(30.8)
Total Long-term Debt			2,926.9		2,971.3

Short-term Debt
Outstanding Principal
Senior Notes issued 2010	5.625%	2020	400.0		—
Less Unamortized Debt Issuance Costs			(0.3)		—
Total Short-term Debt			399.7		—

Total Debt			$	3,326.6	$	2,971.3

Collateralized debt is comprised of our senior secured notes and ranks highest in priority, followed by unsecured notes, which consist of senior notes and medium-term notes, followed by junior subordinated debt securities. The medium-term notes are non-callable and the junior subordinated debt securities are callable under limited, specified circumstances. The remaining debt is callable and may be redeemed, in whole or in part, at any time.

The aggregate contractual principal maturities are $400.0 million in 2020, $2.0 million in 2023, $350.0 million in 2024, and $2,602.5 million thereafter.

Senior Secured Notes

In 2007, Northwind Holdings, LLC (Northwind Holdings), a wholly-owned subsidiary of Unum Group, issued $800.0 million of insured, senior secured notes (the Northwind notes) in a private offering. The Northwind notes bear interest at a floating rate equal to the three-month LIBOR plus 0.78%.

Northwind Holdings’ ability to meet its obligations to pay principal, interest, and other amounts due on the Northwind notes will be dependent principally on its receipt of dividends from Northwind Reinsurance Company (Northwind Re), the sole subsidiary of Northwind Holdings. Northwind Re reinsured the risks attributable to specified individual disability insurance policies issued by or reinsured by Provident Life and Accident Insurance Company, Unum Life Insurance Company of America, and The Paul Revere Life Insurance Company (collectively, the ceding insurers) pursuant to separate reinsurance agreements between Northwind Re and each of the ceding insurers. The ability of Northwind Re to pay dividends to Northwind Holdings will depend on its satisfaction of applicable regulatory requirements and the performance of the reinsured policies.

Recourse for the payment of principal, interest and other amounts due on the Northwind notes is limited to the collateral for the Northwind notes and the other assets, if any, of Northwind Holdings. The collateral consists of a first priority, perfected security interest in (a) the debt service coverage account (DSCA) that Northwind Holdings is required to maintain in accordance with the indenture pursuant to which the Northwind notes were issued (the Northwind indenture), (b) the capital stock of Northwind Re and the dividends and distributions on such capital stock, and (c) Northwind Holdings' rights under the transaction documents related to the Northwind notes to which Northwind Holdings is a party. At December 31, 2019, the amount in the DSCA was $64.3 million. None of Unum Group, the ceding insurers, Northwind Re, or any other affiliate of Northwind Holdings is an obligor or guarantor with respect to the Northwind notes.

Northwind Holdings is required to repay a portion of the outstanding principal under the Northwind notes at par on the quarterly scheduled payment dates under the Northwind notes in an amount equal to the lesser of (i) a targeted amortization amount as defined in the Northwind indenture and (ii) the amount of the remaining available funds in the DSCA minus an amount equal to the minimum balance that is required to be maintained in the DSCA under the Northwind indenture, provided that Northwind Holdings has sufficient funds available to pay its other expenses, including interest payments on the Northwind notes, and to maintain the minimum balance in the DSCA as required under the Northwind indenture. Northwind Holdings made principal payments on the Northwind notes of $60.0 million in each of 2019, 2018, and 2017.

In 2017, we purchased and retired the remaining $3.4 million of principal on our senior secured floating rate notes acquired through our purchase of Starmount Life Insurance Company. In conjunction with this retirement, we also terminated the interest rate swap associated with the hedge of these notes and recorded a $0.1 million loss in our consolidated statements of income as a component of net realized investment gains and losses. See Note 4 for further discussion on the interest rate swap.

Unsecured Notes

During 2019 we purchased and retired (i) $30.3 million aggregate principal amount of our 7.190% medium-term notes due 2028; (ii) $30.0 million aggregate principal amount of our 7.250% senior notes due 2028; and (iii) $350.0 million aggregate principal amount of our 3.000% senior notes due 2021.

In September 2019, we issued $450.0 million of 4.500% senior notes due 2049. The notes are callable at or above par and rank equally in the right of payment with all of our other unsecured and unsubordinated debt.

In June 2019, we issued $400.0 million of 4.000% senior notes due 2029. The notes are callable at or above par and rank equally in the right of payment with all of our other unsecured and unsubordinated debt.

In July 2018, our $200.0 million 7.000% senior unsecured notes matured.

Fair Value Hedges

As of December 31, 2019 and 2018, we had $250.0 million notional amount of an interest rate swap which effectively converts certain of our unsecured senior notes into floating rate debt. Under this agreement, we receive a fixed rate of interest and pay a variable rate of interest, based off of three-month LIBOR. See Note 4 for further information on the interest rate swap.

Junior Subordinated Debt Securities

In May 2018, we issued $300.0 million of 6.250% junior subordinated notes due 2058. The notes are redeemable at or above par on or after June 15, 2023 and rank equally in the right of payment with our other junior subordinated debt securities.

In 1998, Provident Financing Trust I (the Trust), a 100 percent-owned finance subsidiary of Unum Group, issued $300.0 million of 7.405% capital securities due 2038 in a public offering. These capital securities are fully and unconditionally guaranteed by Unum Group, have a liquidation value of $1,000 per capital security, and have a mandatory redemption feature under certain circumstances. In connection with the capital securities offering, Unum Group issued to the Trust 7.405% junior subordinated deferrable interest debentures due 2038. The Trust is a variable interest entity of which Unum Group is not the primary beneficiary. Accordingly, the capital securities issued by the Trust are not included in our consolidated financial statements and our liability represents the junior subordinated debt securities owed to the trust which is recorded in long-term debt. The sole assets of the Trust are the junior subordinated debt securities. The retirement of any liquidation amount regarding the capital securities by the Trust results in a corresponding retirement of principal amount of the junior subordinated debt securities.

During 2019, the Trust purchased and retired $22.8 million aggregate liquidation amount of the 7.405% capital securities due 2038, which resulted in our purchase and retirement of a corresponding principal amount of our 7.405% junior subordinated debt securities due 2038.

Cost Related to Early Retirement of Debt

During 2019, we incurred costs of $27.3 million related to the early retirement of certain of our unsecured notes and junior subordinated debt securities as previously discussed.

Interest Paid

Interest paid on long-term and short-term debt and related securities during 2019, 2018, and 2017 was $172.9 million, $167.3 million, and $154.4 million, respectively.

Credit Facilities

In April 2019, we amended the terms of our existing five-year unsecured revolving credit facility, increasing it from $400.0 million to $500.0 million. The credit facility, which was previously set to expire in 2021, was extended through April 2024. Under the terms of the amended agreement, we may request that the credit facility be increased up to $700.0 million, up from the previous amount of $600.0 million. We also may request, on up to two occasions, that the lenders' commitment termination dates be extended by one year. The credit facility provides for the issuance of letters of credit subject to certain terms and limitations. At December 31, 2019, letters of credit totaling $0.6 million had been issued from the credit facility, but there were no borrowed amounts outstanding.

Also in April 2019, we separately entered into a three-year, $100.0 million unsecured revolving credit facility with a different syndicate of lenders, which is set to expire in April 2022. Under the terms of the agreement, we may request that the credit facility be increased up to $140.0 million. We also may request that the lenders' commitment termination dates be extended by one year. The credit facility provides for the issuance of letters of credit subject to certain terms and limitations. At December 31, 2019, there have been no letters of credit issued from the credit facility and there were no borrowed amounts outstanding.

Borrowings under the credit facilities are for general corporate uses and are subject to financial covenants, negative covenants, and events of default that are customary. The two primary financial covenants include limitations based on our leverage ratio and consolidated net worth. We are also subject to covenants that limit subsidiary indebtedness. The credit facilities provide for borrowings at an interest rate based either on the prime rate or LIBOR.