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Long Term Subordinated Notes
 12 Months Ended
Dec. 31, 2022
Long Term Subordinated Notes [Abstract]  
Long Term Subordinated Notes
7.
 
LONG-TERM SUBORDINATED
 
NOTES
 
The
 
table
 
below
 
displays
 
Holdings’
 
outstanding
 
fixed
 
to
 
floating
 
rate
 
long-term
 
subordinated
 
notes.
 
Market
value
 
is
 
based
 
on
 
quoted
 
market
 
prices,
 
but
 
due
 
to
 
limited
 
trading
 
activity,
 
these
 
subordinated
 
notes
 
are
considered Level 2 in the fair value
 
hierarchy.
Maturity Date
December 31, 2022
December 31, 2021
Original
Consolidated
Consolidated
Principal
Balance Sheet
Balance Sheet
(Dollars in millions)
Date Issued
Amount
Scheduled
Final
Amount
Market Value
Amount
Market Value
Long-term subordinated notes
4/26/2007
$
400
5/15/2037
5/1/2067
$
218
$
187
$
224
$
216
During the fixed
 
rate interest
 
period from
May 3, 2007
 
through
May 14, 2017
, interest
 
was at the
 
annual rate
 
of
6.6
%, payable semi-annually in arrears
 
on November 15 and May 15 of each year,
 
commencing on
November 15,
2007
.
 
During the floating rate
 
interest period from
 
May 15, 2017 through
 
maturity,
 
interest will be based
 
on the
3
 
month
 
LIBOR
 
plus
238.5
 
basis
 
points,
 
reset
 
quarterly,
 
payable
 
quarterly
 
in
 
arrears
 
on
 
February
 
15,
 
May
 
15,
August 15
 
and November
 
15 of
 
each year,
 
subject to
 
Holdings’ right
 
to defer
 
interest
 
on
one
 
or more
 
occasions
for up
 
to
ten
 
consecutive
 
years.
 
Deferred
 
interest
 
will accumulate
 
interest
 
at the
 
applicable rate
 
compounded
quarterly for
 
periods from and
 
including May 15,
 
2017.
 
The reset quarterly
 
interest rate
 
for November
 
15, 2022
to February 14, 2023 is
6.99
%.
 
Holdings may redeem the
 
long-term subordinated
 
notes on or after May
 
15, 2017, in whole or in
 
part at
100
% of
the principal amount
 
plus accrued and unpaid
 
interest; however,
 
redemption on or
 
after the scheduled
 
maturity
date and
 
prior to
May 1, 2047
 
is subject
 
to a
 
replacement
 
capital covenant.
 
This covenant
 
is for
 
the benefit
 
of
certain
 
senior
 
note
 
holders
 
and
 
it
 
mandates
 
that
 
Holdings
 
receive
 
proceeds
 
from
 
the
 
sale
 
of
 
another
subordinated
 
debt issue,
 
of at
 
least similar
 
size, before
 
it may
 
redeem the
 
subordinated
 
notes.
 
The Company’s
4.868
% senior
 
notes due
 
on
June 1, 2044
,
3.5
% senior
 
notes due
 
on
October 15, 2050
 
and
3.125
% senior
 
notes
due
 
on
October 15, 2052
 
are
 
the
 
Company’s
 
long-term
 
indebtedness
 
that
 
rank
 
senior
 
to
 
the
 
long-term
subordinated notes.
 
In
 
2009,
 
the
 
Company
 
had
 
reduced
 
its
 
outstanding
 
amount
 
of
 
long-term
 
subordinated
 
notes
 
through
 
the
initiation
 
of a
 
cash tender
 
offer for
 
any and
 
all of
 
the long-term
 
subordinated
 
notes.
 
In addition,
 
the Company
repurchased
 
and
 
retired
 
$
6
 
million
 
of
 
the
 
outstanding
 
long-term
 
subordinated
 
notes
 
for
 
the
 
year
 
ended
December 31, 2022.
 
The Company realized a gain
 
of $
1
 
million on the repurchases made during 2022.
Interest
 
expense
 
incurred
 
in
 
connection
 
with
 
these
 
long-term
 
subordinated
 
notes
 
is
 
as follows
 
for
 
the
 
periods
indicated:
Years Ended December 31,
(Dollars in millions)
2022
2021
2020
Interest expense incurred
$
9
$
6
$
8