Note 5 - Notes Payable

Total debt outstanding at September 30, 2012 and December 31, 2011 was:



(Dollars in Millions)	Sep 30, 2012		Dec 31, 2011
Senior Notes at Amortized Cost:
6.00% Senior Notes due May 15, 2017	$	357.2	$	356.8
6.00% Senior Notes due November 30, 2015	248.5		248.2
Mortgage Note Payable at Amortized Cost	5.5		5.6
Notes Payable at Amortized Cost	$	611.2	$	610.6

On March 7, 2012, Kemper entered into a new four-year, $325.0 million, unsecured, revolving credit agreement, expiring March 7, 2016 (the “2016 Credit Agreement”), with a group of financial institutions. The 2016 Credit Agreement replaced Kemper’s $245.0 million, unsecured, revolving credit agreement which was scheduled to expire on October 30, 2012 (the “Former Credit Agreement”) and was terminated on March 7, 2012. There were no borrowings under the Former Credit Agreement at either December 31, 2011 or at its termination. The 2016 Credit Agreement provides for fixed and floating rate advances for periods up to six months at various interest rates. The 2016 Credit Agreement contains various financial covenants, including limits on total debt to total capitalization, consolidated net worth and minimum risk-based capital ratios for Kemper’s largest insurance subsidiaries, United Insurance Company of America (“United”) and Trinity Universal Insurance Company (“Trinity”). Proceeds from advances under the 2016 Credit Agreement may be used for general corporate purposes, including repayment of existing indebtedness. There were no outstanding borrowings under the 2016 Credit Agreement at September 30, 2012, and accordingly, $325.0 million was available for future borrowings.

In the first quarter of 2012, the Company wrote off $0.5 million of unamortized issuance costs related to the Former Credit Agreement.

Interest Expense, including facility fees, accretion of discount and write-off of unamortized credit agreement issuance costs, for the nine and three months ended September 30, 2012 and 2011 was:



	Nine Months Ended						Three Months Ended
(Dollars in Millions)	Sep 30, 2012			Sep 30, 2011			Sep 30, 2012			Sep 30, 2011
Notes Payable under Revolving Credit Agreements	$	1.6		$	1.5		$	0.3		$	0.6
Senior Notes Payable:
6.00% Senior Notes due May 15, 2017	16.6			16.5			5.5			5.5
6.00% Senior Notes due November 30, 2015	11.6			11.5			3.9			3.8
Mortgage Note Payable	0.3			0.3			0.1			0.1
Interest Expense before Capitalization of Interest	30.1			29.8			9.8			10.0
Capitalization of Interest	(1.6		)	(1.8		)	(0.2		)	(0.7		)
Total Interest Expense	$	28.5		$	28.0		$	9.6		$	9.3

Note 5 - Notes Payable (continued)

Interest paid, including facility fees and credit agreement issuance costs, for the nine and three months ended September 30, 2012 and 2011 was:



	Nine Months Ended				Three Months Ended
(Dollars in Millions)	Sep 30, 2012		Sep 30, 2011		Sep 30, 2012		Sep 30, 2011
Notes Payable under Revolving Credit Agreements	$	1.9	$	0.5	$	0.2	$	0.3
Senior Notes Payable:
6.00% Senior Notes due May 15, 2017	10.8		10.8		—		—
6.00% Senior Notes due November 30, 2015	7.5		7.8		—		—
Mortgage Note Payable	0.3		0.3		0.1		0.1
Total Interest Paid	$	20.5	$	19.4	$	0.3	$	0.4