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.

 

5.00% 10-Year Senior Notes

ISIN

US852891AC44

CUSIP

852891AC4

Issue Date

08/10/2012

Maturity

08/15/2022

Issue Amount

$250 million

Outstanding Amount

$250 million

Interest Payment

Semi-Annual February and August

Prospectus

Download

 

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.

 

6.90% Subordinated Debt1

ISIN

US852891AB60

CUSIP

852891AB6

Issue Date

05/29/2007

Maturity

06/01/20671

Issue Amount

$300 million

Outstanding Amount

$253 million

Interest Payment

Semi-Annual June and December for first 10 years1

Prospectus

Download

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

 

  Standard & Poor's Moody's A.M. Best

Issuer Credit Rating for StanCorp

BBB+

bbb

Debt Ratings:
5.00%
10-Year Senior Notes (2022)

BBB+

Baa1

bbb+

6.90%
Subordinated Debt

BBB-

Baa2

bbb–

 

Note: Ratings are as of May 2016.

 

Revolving Credit Facility

 

$250 million through 6/22/2018

Required Financial Covenants

 

Total Debt-to-Capitalization Ratio

    < 35%

Consolidated Net Worth

    > $1.25 billion

 

 

As of December 31, 2015

 

Total Debt-to-Capitalization Ratio

23.6%

Consolidated Net Worth

1.79 billion

 

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.