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Debt | 12 Months Ended
--- | ---
Dec. 31, 2017
Debt Disclosure [Abstract] |
Debt | The Company’s long-term debt securities are issued by HFSG Holding Company, and are unsecured obligations of HFSG Holding Company, and rank on a parity with all other unsecured and unsubordinated indebtedness of HFSG Holding Company. Debt issued by HLI with a carrying amount of $142 is included in liabilities held for sale in the accompanying consolidated balance sheets and, therefore, is not included in the table below. Debt is carried net of discount and issuance cost. Interest expense on debt is included in the corporate category for segment reporting. Short-term and Long-term Debt by Issuance
| As of December 31,
| 2017 | 2016
Revolving Credit Facilities | $ | — |  | $ | — |
Senior Notes and Debentures |  |  |  |
5.375% Notes, due 2017 | — |  | 416 |
6.3% Notes, due 2018 | 320 |  | 320 |
6.0% Notes, due 2019 | 413 |  | 413 |
5.5% Notes, due 2020 | 500 |  | 500 |
5.125% Notes, due 2022 | 800 |  | 800 |
5.95% Notes, due 2036 | 300 |  | 300 |
6.625% Notes, due 2040 | 295 |  | 295 |
6.1% Notes, due 2041 | 409 |  | 409 |
6.625% Notes, due 2042 | 178 |  | 178 |
4.3% Notes, due 2043 | 300 |  | 300 |
Junior Subordinated Debentures |  |  |  |
7.875% Notes, due 2042 | 600 |  | 600 |
3 month Libor + 2.125% Notes, due 2067 [1] | 500 |  | — |
8.125% Notes, due 2068 | 500 |  | 500 |
Total Notes and Debentures | 5,115 |  | 5,031 |
Unamortized discount and debt issuance cost [2] | (117 | ) | (122 | )
Total Debt | 4,998 |  | 4,909 |
Less: Current maturities | 320 |  | 416 |
Long-Term Debt | $ | 4,678 |  | $ | 4,493 |
[1] | In April 2017, the Company entered into an interest rate swap agreement expiring February 15, 2027 to effectively convert the variable interest payments for this debenture into fixed interest payments of approximately 4.39%.
[2] | The amount primarily consists of $79 and $83 as of December 31, 2017 and 2016, respectively, on the 6.1% Notes, due 2041.
The effective interest rate on the 6.1% senior notes due 2041 is 7.9%. The effective interest rate on the remaining notes does not differ materially from the stated rate. The Company incurred interest expense of $316, $327 and $346 on debt for the years ended December 31, 2017, 2016 and 2015, respectively. Senior Notes On March 15, 2017, the Company repaid its $416, 5.375% senior notes at maturity. Junior Subordinated Debentures Junior Subordinated Debentures by Issuance
Issue | 7.875% Debentures | 8.125% Debentures [3] | 3 Month Libor + 2.125%
Face Value | $ | 600 |  | $ | 500 |  | $ | 500 |
Interest Rate [1] | 7.875 | % | [2] | 8.125 | % | [4] | N/A | [5]
Call Date | April 15, 2022 |  | June 15, 2018 |  | February 15, 2017 | [6] |
Interest Rate Subsequent to Call Date [2] | 3 Month Libor + 5.596% |  | 3 Month Libor + 4.6025% |  | 3 Month Libor + 2.125% | [7]
Final Maturity | April 15, 2042 |  | June 15, 2068 |  | February 12, 2067 |
[1] | Interest rate in effect until call date.
[2] | Payable quarterly in arrears.
[3] | The 8.125% debentures have a scheduled maturity date of June 15, 2038.
[4] | Payable semi-annually in arrears.
[5] | Debentures were issued on call date.
[6] | Reflects original call date: Replacement Capital Covenant associated with the debenture prohibits the Company from redeeming all or any portion of the notes on or prior to February 15, 2022.
[7] | In April, 2017 the company entered into an interest rate swap agreement expiring February 15, 2027 to effectively convert the interest payments for the 3 month Libor + 2.125% debenture into fixed interest payments of approximately 4.39%.
The debentures are unsecured, subordinated and junior in right of payment and upon liquidation to all of the Company’s existing and future senior indebtedness. In addition, the debentures are effectively subordinated to all of the Company’s subsidiaries’ existing and future indebtedness and other liabilities, including obligations to policyholders. The debentures do not limit the Company’s or the Company’s subsidiaries’ ability to incur additional debt, including debt that ranks senior in right of payment and upon liquidation to the debentures. The Company has the right to defer interest payments for up to ten consecutive years without giving rise to an event of default. Deferred interest will continue to accrue and will accrue additional interest at the then applicable interest rate. If the Company defers interest payments, the Company generally may not make payments on or redeem or purchase any shares of its capital stock or any of its debt securities or guarantees that rank upon liquidation, dissolution or winding up equally with or junior to the debentures, subject to certain limited exceptions. If the Company defers interest on the 8.125% and 3 month Libor plus 2.125% debentures for five consecutive years or, if earlier, pays current interest during a deferral period, the Company will be required to pay deferred interest from proceeds from the sale of certain qualifying securities. The 7.875% , 8.125% and 3 month Libor plus 2.125% debentures may be redeemed in whole prior to the call date upon certain tax or rating agency events, at a price equal to the greater of 100% of the principal amount being redeemed and the applicable make-whole amount plus any accrued and unpaid interest. The Company may elect to redeem the 8.125% debentures in whole or part at its option prior to the call date at a price equal to the greater of 100% of the principal amount being redeemed and the applicable make-whole amount plus any accrued and unpaid interest. The Company may elect to redeem the 7.875% , 8.125% and 3 month Libor plus 2.125% debentures in whole or in part on or after the call date for the principal amount being redeemed plus accrued and unpaid interest to the date of redemption. In connection with the offering of the 8.125% debentures, the Company entered into a replacement capital covenant ("RCC") for the benefit of holders of one or more designated series of the Company's indebtedness, initially the Company’s 6.1% notes due 2041. Under the terms of the RCC, if the Company redeems the 8.125% debentures at any time prior to June 15, 2048 it can only do so with the proceeds from the sale of certain qualifying replacement securities. On February 7, 2017, the Company executed an amendment to the RCC to lengthen the amount of time the Company has to issue qualifying replacement securities prior to the redemption of the 8.125% debentures and to amend the definition of certain qualifying replacement securities. The 3 month Libor plus 2.125% debentures are qualifying replacement securities within the definition of the RCC, as amended. In connection with the offering of the three month LIBOR plus 2.125% debenture, the Company entered into a RCC for the benefit of holders of one or more designated series of the Company's indebtedness, initially the Company's 4.3% notes due 2043. Under the terms of the RCC, if the Company redeems the debenture any time prior to February 12, 2047 (or such earlier date on which the RCC terminates by its terms) it can only do so with the proceeds from the sale of certain qualifying replacement securities. The RCC also prohibits the Company from redeeming all or any portion of the notes on or prior to February 15, 2022. In April, 2017 the company entered into an interest rate swap agreement expiring February 15, 2027 to effectively convert the variable interest payments for the 3 month Libor plus 2.125% debenture into fixed interest payments of approximately 4.39%. Long-Term Debt Long-term Debt Maturities (at par value) as of December 31, 2017
2018 - Current maturities | $ | 320 |
2019 | $ | 413 |
2020 | $ | 500 |
2021 | $ | — |
2022 | $ | 800 |
Thereafter | $ | 3,082 |
Shelf Registrations On July 29, 2016, the Company filed with the Securities and Exchange Commission (the “SEC”) an automatic shelf registration statement (Registration No. 333-212778) for the potential offering and sale of debt and equity securities. The registration statement allows for the following types of securities to be offered: debt securities, junior subordinated debt securities, preferred stock, common stock, depositary shares, warrants, stock purchase contracts, and stock purchase units. In that The Hartford is a well-known seasoned issuer, as defined in Rule 405 under the Securities Act of 1933, the registration statement went effective immediately upon filing and The Hartford may offer and sell an unlimited amount of securities under the registration statement during the three-year life of the registration statement. Contingent Capital Facility The Hartford was party to a put option agreement that provided The Hartford with the right to require the Glen Meadow ABC Trust, a Delaware statutory trust, at any time and from time to time, to purchase The Hartford's junior subordinated notes in a maximum aggregate principal amount not to exceed $500. On February 8, 2017, The Hartford exercised the put option resulting in the issuance of $500 in junior subordinated notes with proceeds received on February 15, 2017. Under the Put Option Agreement, The Hartford had been paying the Glen Meadow ABC Trust premiums on a periodic basis, calculated with respect to the aggregate principal amount of notes that The Hartford had the right to put to the Glen Meadow ABC Trust for such period. The Hartford agreed to reimburse the Glen Meadow ABC Trust for certain fees and ordinary expenses. Up until the Company exercised the put option, the Company held a variable interest in the Glen Meadow ABC Trust where the Company was not the primary beneficiary. As a result, the Company did not consolidate the Glen Meadow ABC Trust. The junior subordinated notes have a scheduled maturity of February 12, 2047, and a final maturity of February 12, 2067. As noted in the table above, the Company is required to use reasonable efforts to sell certain qualifying replacement securities in order to repay the debentures at the scheduled maturity date. The junior subordinated notes bear interest at an annual rate of three-month LIBOR plus 2.125%, payable quarterly, and are unsecured, subordinated indebtedness of The Hartford. Revolving Credit Facilities The Company has a senior unsecured five-year revolving credit facility (the “Credit Facility”) that provides for borrowing capacity up to $1 billion of unsecured credit through October 31, 2019 available in U.S. dollars, Euro, Sterling, Canadian dollars and Japanese Yen. As of December 31, 2017, no borrowings were outstanding under the Credit Facility. As of December 31, 2017, the Company was in compliance with all financial covenants within the Credit Facility. Commercial Paper The Hartford’s maximum borrowings available under its commercial paper program are $1 billion. The Company is dependent upon market conditions to access short-term financing through the issuance of commercial paper to investors. As of December 31, 2017, there was no commercial paper outstanding.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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