Note 4 - Debt

The amortized cost of debt outstanding at March 31, 2015 and December 31, 2014 was:



(Dollars in Millions)	Mar 31, 2015		Dec 31, 2014
Senior Notes:
6.00% Senior Notes due November 30, 2015	$	—	$	249.5
6.00% Senior Notes due May 15, 2017	358.6		358.5
4.35% Senior Notes due February 15, 2025	247.3		—
7.375% Subordinated Debentures due February 27, 2054	144.1		144.1
Total Debt Outstanding	$	750.0	$	752.1

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, Trinity Universal Insurance Company (“Trinity”) and United Insurance Company of America (“United Insurance”). 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 March 31, 2015 or December 31, 2014.

Trinity and United Insurance are members of the Federal Home Loan Bank (“FHLB”) of Dallas and Chicago, respectively. As members, Trinity and United Insurance may obtain advances from the FHLB of Dallas and Chicago, respectively. Advances from the FHLB of Dallas and Chicago are subject to collateral requirements as specified in the respective agreements with Trinity and United Insurance. During the first three months of 2015, Trinity borrowed and repaid $20.5 million under its agreement with the FHLB of Dallas. There were no advances from the FHLB of Dallas or Chicago outstanding at either March 31, 2015 or December 31, 2014.

On February 24, 2015, Kemper issued $250.0 million of its 4.35% senior notes due February 15, 2025 (the “2025 Senior Notes”). The net proceeds of the issuance were $247.3 million, net of discount and transaction costs, for an effective yield of 4.49%. The 2025 Senior Notes are unsecured and may be redeemed in whole at any time or in part from time to time at Kemper’s option at specified redemption prices. Kemper used the net proceeds from the sale of the 2025 Senior Notes, together with available cash, to redeem in full the $250.0 million outstanding principal amount of its 6.00% Senior Notes due November 30, 2015. Kemper recognized a loss of $9.1 million before income taxes for the three months ended March 31, 2015 from the early redemption of these senior notes.

Note 4 - Debt (Continued)

Interest Expense, including facility fees, accretion of discount and amortization of issuance costs, for the three months ended March 31, 2015 and 2014 was:



	Three Months Ended
(Dollars in Millions)	Mar 31, 2015			Mar 31, 2014
Notes Payable under Revolving Credit Agreement	$	0.2		$	0.2
Federal Home Loan Bank of Dallas	—			—
Federal Home Loan Bank of Chicago	—			—
Senior Notes Payable:
6.00% Senior Notes due November 30, 2015	3.7			3.9
6.00% Senior Notes due May 15, 2017	5.6			5.5
4.35% Senior Notes due February 15, 2025	1.1			—
7.375% Subordinated Debentures due February 27, 2054	2.8			1.0
Interest Expense before Capitalization of Interest	13.4			10.6
Capitalization of Interest	(0.2		)	(0.3		)
Total Interest Expense	$	13.2		$	10.3

Interest paid, including facility fees, for the three months ended March 31, 2015 and 2014 was:



	Three Months Ended
(Dollars in Millions)	Mar 31, 2015		Mar 31, 2014
Notes Payable under Revolving Credit Agreement	$	0.2	$	0.2
Federal Home Loan Bank of Dallas	—		—
Federal Home Loan Bank of Chicago	—		—
Senior Notes Payable:
6.00% Senior Notes due November 30, 2015	4.8		—
6.00% Senior Notes due May 15, 2017	—		—
4.35% Senior Notes due February 15, 2025	—		—
7.375% Subordinated Debentures due February 27, 2054	2.8		—
Total Interest Paid	$	7.8	$	0.2