Note 4 - Debt

Long-term Debt

The Company designates debt obligations as either short-term or long-term based on maturity date at issuance. Total amortized cost of Long-term Debt outstanding at March 31, 2018 and December 31, 2017 was:



(Dollars in Millions)	Mar 31, 2018		Dec 31, 2017
4.35% Senior Notes due February 15, 2025	448.1		448.1
7.375% Subordinated Debentures due February 27, 2054	144.2		144.2
Total Long-term Debt Outstanding	$	592.3	$	592.3

Short-term Debt

Kemper’s subsidiaries, United Insurance Company of America (“United Insurance”) and Trinity Universal Insurance Company (“Trinity”), are members of the Federal Home Loan Bank (“FHLB”) of Chicago and Dallas, respectively. In March of 2018, United Insurance received advances of $10.0 million from the FHLB of Chicago. The advances, which mature in one year or less, were made in connection with the start-up of the Company’s collateralized investment borrowing program. In connection with the advances, United Insurance pledged U.S. Government Agency securities with a fair value of $17.7 million at March 31, 2018. The fair value of the collateral pledged must be maintained at certain specified levels above the borrowed amount, which can vary depending on the assets pledged. If the fair value of the collateral declines below these specified levels of the amount borrowed, United Insurance would be required to pledge additional collateral or repay outstanding borrowings. Accrued Expenses and Other Liabilities in the Condensed Consolidated Balance Sheet at March 31, 2018 includes $10.0 million related to these advances. There were no advances from the FHLB of Chicago as of December 31, 2017. There were no advances from the FHLB of Dallas outstanding at either March 31, 2018 or December 31, 2017. As a requirement of membership in the FHLB, United Insurance and Trinity maintain a certain level of investment in FHLB stock. Total holdings of FHLB of Chicago stock were $0.4 million at March 31, 2018 and December 31, 2017. Total holdings of FHLB of Dallas stock were $3.3 million at March 31, 2018 and December 31, 2017.

There were no outstanding borrowings at either March 31, 2018 or December 31, 2017 under Kemper’s $225.0 million, unsecured, revolving credit agreement which expires June 2, 2020.

Note 4 - Debt (continued)

Interest Expense

Interest Expense, including facility fees, accretion of discount and amortization of issuance costs, was $8.0 million for the three months ended March 31, 2018. Interest paid, including facility fees, was $12.5 million for the three months ended March 31, 2018. Interest Expense, including facility fees, accretion of discount and amortization of issuance costs, was $10.9 million for the three months ended March 31, 2017. Interest paid, including facility fees, was $8.3 million for the three months ended March 31, 2017.