Debt Information

Debt Issues

2022 Senior Notes

On August 10, 2012, StanCorp completed an initial public debt offering of $250 million of 10-year senior notes (“2022 Senior Notes”) with an interest rate of 5.00%. The principal amount of the 2022 Senior Notes is payable at maturity on August 15, 2022, and interest is payable semi-annually in February and August.

Subordinated Debt

On May 29, 2007, StanCorp completed a public debt offering of $300 million of junior subordinated debentures (“Subordinated Debt”) with an interest rate of 6.90%. The Subordinated Debt has a final maturity on June 1, 2067, is non-callable at par for the first 10 years (prior to June 1, 2017). The principal amount of the Subordinated Debt is payable at final maturity. Interest is payable semi-annually at 6.90% in June and December for the first 10 years up to June 1, 2017, and quarterly thereafter at a floating rate equal to three-month LIBOR plus 2.51%. StanCorp has the option to defer interest payments for up to five years. The declaration and payment of dividends to shareholders would be restricted if the Company elected to defer interest payments on its Subordinated Debt. If elected, the restriction would be in place during the interest deferral period. StanCorp is currently not deferring interest on the Subordinated Debt.

1 For more information on the interest rate and terms of the subordinated debt, please see the Prospectus.

Revolving Credit Facility

StanCorp maintains a $250 million senior unsecured revolving credit facility (“Facility”). Additionally, upon a request by StanCorp and with consent of the lenders under the Facility, the Facility can be increased to $350 million. The termination date of the Facility is June 22, 2018. Borrowings under the Facility will be used to provide working capital for issuance of letters of credit and for general corporate purposes.

Under the agreement, StanCorp is subject to customary covenants that take into consideration the impact of material transactions, changes to the business, compliance with legal requirements and financial performance. The two financial covenants are based on the Company's total debt to total capitalization ratio and consolidated net worth. Under the two financial covenants, the Company is required to maintain a total debt to capitalization ratio that does not exceed 35% and a consolidated net worth that is equal to at least $1.25 billion. The financial covenants exclude the unrealized gains and losses related to fixed maturity securities that are held in accumulated other comprehensive income (loss). The Facility is subject to performance pricing based upon the Company's publicly announced debt ratings and includes an interest rate option at the election of the borrower of a base rate plus the applicable margin or the LIBOR rate plus the applicable margin, plus facility and utilization fees. At December 31, 2015, the Company was in compliance with all covenants under the Facility and had no outstanding balance on the Facility. The Company believes it will continue to meet the financial covenants throughout the life of the Facility.