XML 43 R19.htm IDEA: XBRL DOCUMENT v3.24.0.1
DEBT AND FINANCING ARRANGEMENTS
 12 Months Ended
Dec. 31, 2023
Debt Disclosure [Abstract]  
DEBT AND FINANCING ARRANGEMENTS DEBT AND FINANCING ARRANGEMENTS
a)    Debt

The following table summarizes the Company's debt:
Year ended December 31,20232022
5.150% Senior Notes
$246,789 $246,708 
4.000% Senior Notes
348,389 348,020 
3.900% Senior Notes
297,076 296,615 
Junior Subordinated Notes421,460 420,971 
Total Debt$1,313,714 $1,312,314 

The tables below provide the key terms of the Company's debt:
DescriptionIssuance DateAggregate PrincipalIssue PriceNet ProceedsMaturity Date
5.150% Senior Notes
March 13, 2014$250,000 99.474 %$246,000 April 1, 2045
4.000% Senior Notes
December 6, 2017$350,000 99.780 %$347,000 December 6, 2027
3.900% Senior Notes
June 19, 2019$300,000 99.360 %$296,000 July 15, 2029
Junior Subordinated NotesDecember 10, 2019$425,000 99.000 %$420,750 January 15, 2040

DescriptionInterest RateInterest Payments Due
5.150% Senior Notes
5.150 %Semi-annually in arrears on April 1 and October 1 of each year
4.000% Senior Notes
4.000 % Semi-annually in arrears on June 6 and December 6 of each year
3.900% Senior Notes
3.900 %Semi-annually in arrears on January 15 and July 15 of each year
Junior Subordinated Notes(1)
4.900 %Semi-annually on January 15 and July 15 of each year
(1)    The Junior Subordinated Notes accrue interest from the date of issuance to, but excluding, January 15, 2030 (the "Par Call Date") at the fixed rate of 4.900% and from, and including, the Par Call Date, at a rate equal to the Five-Year Treasury Rate as of the Reset Interest Determination Date, plus 3.186%. Interest on the Junior Notes is payable semi-annually on January 15 and July 15 of each year, beginning on July 15, 2020.
5.150% Senior Notes
The 5.150% Senior Notes are ranked as unsecured senior obligations of AXIS Specialty Finance PLC, a 100% owned finance subsidiary. AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance PLC under the 5.150% Senior Notes. AXIS Capital's obligations under this guarantee are unsecured senior obligations and rank equally with all other senior obligations of AXIS Capital.
4.000% Senior Notes
The 4.000% Senior Notes are ranked as unsecured senior obligations of AXIS Specialty Finance PLC, a 100% owned finance subsidiary. AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance PLC under the 4.000% Senior Notes. AXIS Capital's obligations under this guarantee are unsecured senior obligations and rank equally with all other senior obligations of AXIS Capital.
3.900% Senior Notes
The 3.900% Senior Notes are ranked as unsecured senior obligations of AXIS Specialty Finance LLC, a 100% owned finance subsidiary. AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance LLC under the
3.900% Senior Notes. AXIS Capital's obligations under this guarantee are unsecured senior obligations and rank equally with all other senior obligations of AXIS Capital.
The Company has the option to redeem the Senior Notes at any time and from time to time, in whole or in part, at a ''make-whole'' redemption price, which is equal to the greater of the aggregate principal amount or the sum of the present values of the remaining scheduled payments of principal and interest. The related indentures contain various covenants, including limitations on liens on the stock of restricted subsidiaries, restrictions as to the disposition of the stock of restricted subsidiaries and limitations on mergers and consolidations. The Company was in compliance with all the covenants contained in the indentures at December 31, 2023.
Interest expense recognized in relation to the Senior Notes includes interest payable, amortization of the offering discounts and amortization of debt offering expenses. The offering discounts and debt offering expenses are amortized over the period of time during which the Senior Notes are outstanding. For the year ended December 31, 2023, the Company incurred interest expense of $40 million (2022: $40 million, 2021: $40 million).
Junior Subordinated Notes
The 4.900% Fixed-Rate Reset Junior Notes are ranked as unsecured junior subordinated obligations of AXIS Specialty Finance LLC, a 100% owned finance subsidiary. AXIS Capital has fully and unconditionally guaranteed all obligations of AXIS Specialty Finance LLC under the Junior Notes. AXIS Capital's obligation under this guarantee is an unsecured junior subordinated obligation and ranks equally with all future unsecured junior subordinated obligations of AXIS Capital, and junior in right of payment to all outstanding and future senior obligations of AXIS Capital.
Interest expense recognized in relation to the Junior Notes includes interest payable and amortization of debt offering expenses. The debt offering expenses are amortized over the period of time during which the Junior Notes are outstanding. For the year ended December 31, 2023, the Company incurred interest expense of $21 million (2022: $21 million).

Scheduled Debt Maturity
The following table provides the scheduled maturity of the Company's debt obligations at December 31, 2023:
Year ended December 31,
2024$— 
2025— 
2026— 
2027350,000 
2028— 
After 2028975,000 
Unamortized discount and debt issuance expenses(11,286)
Total senior notes and notes payable$1,313,714 
b)    Loan Advances made to a Third Party Reinsurer
During 2023, the Company advanced $102 million (2022: $116 million) to a third party reinsurer. This loan is being repaid in a manner consistent with the timing of amounts due to the third party reinsurer under retrocession agreements. At December 31, 2023, $82 million (2022: $80 million) was repaid and was treated as a non-cash activity in the consolidated statement of cash flows. The loan is expected to be repaid in full by February 15, 2026 (2022: February 15, 2025). The loan balance receivable at December 31, 2023, of $80 million (2022: $87 million) is included in loan advances made in the consolidated balance sheets. At December 31, 2023, the Company had committed to advance a further $26 million to the third party reinsurer.
Interest on this loan is payable at interest rates between 0.8% and 4.0% (2022: 0.8% and 4.0%). Interest of $1 million (2022: $1 million) related to this loan was received in advance and is included in other liabilities in the consolidated balance sheets and was treated as a non-cash activity in the consolidated statement of cash flows.

c)    Letter of Credit Facility
At December 31, 2023, certain of AXIS Capital’s operating subsidiaries (the "Participating Subsidiaries") had a $500 million letter of credit facility available from Citibank Europe plc ("Citibank") (the "$500 million Facility"). pursuant to a Master Reimbursement Agreement May 14, 2010, as amended, and Committed Letter of Credit Facility Letter dated December 18, 2015, as amended. (together, the "LOC Facility Documents").
Under the terms of the $500 million Facility, letters of credit to a maximum aggregate amount of $500 million are available for issuance on behalf of the Participating Subsidiaries. These letters of credit are principally used to support the reinsurance obligations of the Participating Subsidiaries. The $500 million Facility is subject to certain covenants, including the requirement to maintain sufficient collateral, as defined in the LOC Facility Documents to cover all of the obligations under the $500 million Facility. Such obligations include contingent reimbursement obligations for outstanding letters of credit and fees payable to Citibank. In the event of default, Citibank may exercise certain remedies, including the exercise of control over pledged collateral and the termination of the availability of the $500 million Facility to any or all of the Participating Subsidiaries.
On March 27, 2017, the Participating Subsidiaries amended their existing $500 million Facility to include an additional $250 million of secured letter of credit capacity (the "$250 million Facility"). Under the terms of the amended $750 million Facility, letters of credit to a maximum aggregate amount of $250 million are available for issuance on behalf of the Participating Subsidiaries once the $500 million Facility has been fully utilized.
On March 31, 2021, the Participating Subsidiaries amended their existing secured $750 million Facility to reduce the utilization capacity available under the $250 million Facility to $150 million, reducing the maximum aggregate utilization capacity of the credit facility from $750 million to $650 million.

On March 31, 2023, the $150 million secured letter of credit facility expired.

On December 29, 2023, the $500 million Facility was amended to extend the tenors of issuable letters of credit (i) denominated in a currency other than Australian or New Zealand dollars to March 31, 2025 and (ii) denominated in either Australian dollars or New Zealand dollars to March 31, 2026.

At December 31, 2023, letters of credit outstanding under the LOC Facility were $325 million (2022: $362 million). At December 31, 2023, the Participating Subsidiaries were in compliance with all LOC Facility covenants.