XML 68 R10.htm IDEA: XBRL DOCUMENT v2.4.0.8
Debt
6 Months Ended
Jun. 30, 2014
Debt Disclosure [Abstract]  
Debt
Note 4 - Debt
The amortized cost of debt outstanding at June 30, 2014 and December 31, 2013 was:
(Dollars in Millions)
 
Jun 30,
2014
 
Dec 31,
2013
Senior Notes:
 
 
 
 
6.00% Senior Notes due November 30, 2015
 
$
249.3

 
$
249.0

6.00% Senior Notes due May 15, 2017
 
358.2

 
357.9

7.375% Subordinated Debentures due February 27, 2054
 
144.2

 

Total Debt Outstanding
 
$
751.7

 
$
606.9


Kemper has a four-year, $225.0 million, unsecured, revolving credit agreement, expiring March 7, 2016, with a group of financial institutions. The credit agreement provides for fixed and floating rate advances for periods up to six months at various interest rates. The 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 Insurance”) and Trinity Universal Insurance Company (“Trinity”). Proceeds from advances under the credit agreement may be used for general corporate purposes, including repayment of existing indebtedness. There were no outstanding borrowings under the credit agreement at either June 30, 2014 or December 31, 2013.
United Insurance and Trinity are members of the Federal Home Loan Bank (“FHLB”) of Chicago and Dallas, respectively. The FHLB memberships provide United Insurance and Trinity with access to additional sources of liquidity. Effective December 31, 2013, Trinity and the FHLB of Dallas entered into agreements pursuant to which Trinity may obtain advances from the FHLB of Dallas. Effective March 18, 2014, United Insurance and the FHLB of Chicago entered into agreements pursuant to which United Insurance may obtain advances from the FHLB of Chicago. Advances from the FHLB of Dallas and Chicago are subject to collateral requirements as specified in the respective agreements with Trinity and United Insurance. There were no advances from the FHLB of Dallas or Chicago outstanding at either June 30, 2014 or December 31, 2013.
On February 27, 2014, Kemper issued $150.0 million of its 7.375% subordinated debentures due February 27, 2054 (the “2054 Subordinated Debentures”). The net proceeds of the issuance were $144.2 million, net of discount and transaction costs, for an effective yield of 7.69%. The 2054 Subordinated Debentures are unsecured and are subordinated and junior to the senior indebtedness of Kemper. Interest on the 2054 Subordinated Debentures is payable quarterly. As long as no event of default has occurred, Kemper may defer interest payments on the 2054 Subordinated Debentures for up to five consecutive years without giving rise to an event of default. During a deferral period, interest will continue to accrue at the stated interest rate compounded quarterly. Kemper is permitted to redeem some or all of the 2054 Subordinated Debentures on or after February 27, 2019, at a redemption price that is equal to their principal amount plus accrued and unpaid interest. Kemper is permitted to redeem the 2054 Subordinated Debentures in whole, but not in part, at any time prior to February 27, 2019, within 90 days of the occurrence of certain tax events or rating agency events, at specified redemption prices.
Note 4 - Debt (Continued)
Interest Expense, including facility fees, accretion of discount and amortization of issuance costs, for the six and three months ended June 30, 2014 and 2013 was:
 
 
Six Months Ended
 
Three Months Ended
(Dollars in Millions)
 
Jun 30,
2014
 
Jun 30,
2013
 
Jun 30,
2014
 
Jun 30,
2013
Notes Payable under Revolving Credit Agreement
 
$
0.4

 
$
0.6

 
$
0.2

 
$
0.3

Senior Notes Payable:
 
 
 
 
 
 
 
 
6.00% Senior Notes due November 30, 2015
 
7.7

 
7.7

 
3.8

 
3.8

6.00% Senior Notes due May 15, 2017
 
11.1

 
11.1

 
5.6

 
5.6

7.375% Subordinated Debentures due February 27, 2054
 
3.8

 

 
2.8

 

Mortgage Note Payable
 

 
0.2

 

 
0.1

Interest Expense before Capitalization of Interest
 
23.0

 
19.6

 
12.4

 
9.8

Capitalization of Interest
 
(0.5
)
 
(0.5
)
 
(0.2
)
 
(0.2
)
Total Interest Expense
 
$
22.5

 
$
19.1

 
$
12.2

 
$
9.6

Interest paid, including facility fees, for the six and three months ended June 30, 2014 and 2013 was:
 
 
Six Months Ended
 
Three Months Ended
(Dollars in Millions)
 
Jun 30,
2014
 
Jun 30,
2013
 
Jun 30,
2014
 
Jun 30,
2013
Notes Payable under Revolving Credit Agreement
 
$
0.3

 
$
0.2

 
$
0.1

 
$
0.2

Senior Notes Payable:
 
 
 
 
 
 
 
 
6.00% Senior Notes due November 30, 2015
 
7.5

 
7.5

 
7.5

 
7.5

6.00% Senior Notes due May 15, 2017
 
10.8

 
10.8

 
10.8

 
10.8

7.375% Subordinated Debentures due February 27, 2054
 
2.8

 

 
2.8

 

Mortgage Note Payable
 

 
0.2

 

 
0.1

Total Interest Paid
 
$
21.4

 
$
18.7

 
$
21.2

 
$
18.6