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Indebtedness | 12 Months Ended
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Dec. 31, 2016
Debt Disclosure [Abstract] |
Indebtedness | Indebtedness The table below provides a summary of our outstanding debt at December 31, 2016 and 2015:
Outstanding Debt |  |  |  |  |  |  |  |  |  | 2016 |  | Carry Value
($ in thousands) |  | Issuance Date |  | Maturity Date |  | Interest Rate |  | Original Amount |  | Debt Discount and Unamortized Issuance Costs |  | December 31, 2016 |  | December 31, 2015
Description |  |  |  |  |  |  |
Short-term: |  |  |  |  |  |  |  |  |  |  |  |  |  |
(1) FHLBI |  | 1/22/2015 |  | 7/22/2016 |  | 0.63 | % |  | $ | 15,000 |  |  | — |  |  | — |  |  | 15,000 |
(2) FHLBI |  | 12/16/2011 |  | 12/16/2016 |  | 1.25 | % |  | 45,000 |  |  | — |  |  | — |  |  | 45,000 |
Total short-term debt |  |  |  |  |  |  |  | $ | 60,000 |  |  | — |  |  | — |  |  | 60,000 |
Long-term: |  |  |  |  |  |  |  |  |  |  |  |  |  |
(3) FHLBI |  | 12/16/2016 |  | 12/16/2026 |  | 3.03 | % |  | $ | 60,000 |  |  | — |  |  | 60,000 |  |  | — |
(4) FHLBNY |  | 8/15/2016 |  | 8/16/2021 |  | 1.56 | % |  | 25,000 |  |  | — |  |  | 25,000 |  |  | — |
(5) FHLBNY |  | 7/21/2016 |  | 7/21/2021 |  | 1.61 | % |  | 25,000 |  |  | — |  |  | 25,000 |  |  | — |
(6) Senior Notes |  | 2/8/2013 |  | 2/9/2043 |  | 5.875 | % |  | 185,000 |  |  | (4,932 | ) |  | 180,068 |  |  | 179,684 |
(7) Senior Notes |  | 11/3/2005 |  | 11/1/2035 |  | 6.70 | % |  | 100,000 |  |  | (1,048 | ) |  | 98,952 |  |  | 98,890 |
(8) Senior Notes |  | 11/16/2004 |  | 11/15/2034 |  | 7.25 | % |  | 50,000 |  |  | (353 | ) |  | 49,647 |  |  | 49,618 |
Total long-term debt |  |  |  |  |  |  |  |  | $ | 445,000 |  |  | (6,333 | ) |  | 438,667 |  |  | 328,192 |
Short-term Debt (1) In January 2015, Selective Insurance Company of South Carolina ("SICSC") and Selective Insurance Company of the Southeast ("SICSE"), collectively referred to as the "Indiana Subsidiaries," borrowed $15 million in the aggregate from the FHLBI with an interest rate of 0.63%. The funds were used for general corporate purposes. We repaid this borrowing on July 22, 2016. (2) In December 2011, the Indiana Subsidiaries borrowed $45 million in the aggregate from the FHLBI with an interest rate of 1.25%. The funds were loaned to the Parent for use in the acquisition of Mesa Underwriters Specialty Insurance Company ("MUSIC") on December 31, 2011. We repaid this borrowing in December 2016. In addition to the above borrowings, the Parent's line of credit with Wells Fargo Bank, National Association, as administrative agent, and Branch Banking and Trust Company (BB&T) (referred to as our "Line of Credit"), was renewed effective December 1, 2015, with a borrowing capacity of $30 million, which can be increased to $50 million with the approval of both lending partners. Our Line of Credit expires on December 1, 2020, and has an interest rate, which varies and is based on, among other factors, the Parent’s debt ratings. There were no balances outstanding under our Line of Credit at December 31, 2016 or at any time during 2016. Our Line of Credit agreement contains representations, warranties, and covenants that are customary for credit facilities of this type, including, without limitation, financial covenants under which we are obligated to maintain a minimum consolidated net worth, minimum combined statutory surplus, maximum ratio of consolidated debt to total capitalization, and covenants limiting our ability to: (i) merge or liquidate; (ii) incur debt or liens; (iii) dispose of assets; (iv) make investments and acquisitions; and (v) engage in transactions with affiliates. The table below outlines information regarding certain of the covenants in the Line of Credit:
|  | Required as of |  | Actual as of
|  | December 31, 2016 |  | December 31, 2016
Consolidated net worth |  | Not less than $1.1 billion |  | $1.5 billion
Statutory surplus |  | Not less than $750 million |  | $1.6 billion
Debt-to-capitalization ratio 1 |  | Not to exceed 35% |  | 22.5%
A.M. Best financial strength rating |  | Minimum of A- |  | A
1 Calculated in accordance with the Line of Credit agreement. In addition to the above requirements, the Line of Credit agreement contains a cross-default provision that provides that the Line of Credit will be in default if we fail to comply with any condition, covenant, or agreement (including payment of principal and interest when due on any debt with an aggregate principal amount of at least $20 million), which causes or permits the acceleration of principal. Refer to "Financial Condition, Liquidity, and Capital Resources" in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations." for further discussion regarding limitations on aggregate borrowings by the FHLBI and FHLBNY permitted by our Line of Credit. Long-term Debt (3) In the first quarter of 2009, the Indiana Subsidiaries joined, and invested in, the FHLBI, which provides them with access to additional liquidity. The Indiana Subsidiaries’ aggregate investment in the FHLBI was $2.8 million at December 31, 2016 and $2.8 million at December 31, 2015. Our investment provides us the ability to borrow approximately 20 times the total amount of the FHLBI common stock purchased with additional collateral, at comparatively low borrowing rates. In December 2016, the Indiana Subsidiaries borrowed $60 million from the FHLBI at an interest rate of 3.03%. The principal amount of this borrowing is due on December 16, 2026. $45 million of the proceeds were used to repay the then outstanding $45 million borrowing from the FHLBI and the remaining $15 million was used for general corporate purposes. All borrowings from the FHLBI require security. For information on investments that are pledged as collateral for these borrowings, see Note 5. "Investments" above. (4) In the fourth quarter of 2015, SICA and Selective Insurance Company of New York ("SICNY") joined, and invested in, the FHLBNY, which provides them with access to additional liquidity. The aggregate investment for both subsidiaries was $2.8 million at December 31, 2016 and $0.5 million at December 31, 2015. Our investment provides us the ability to borrow approximately 20 times the total amount of the FHLBNY common stock purchased with additional collateral, at comparatively low borrowing rates. In August 2016, SICA borrowed $25 million from the FHLBNY. The unpaid principal amount accrues interest of 1.56%. The principal amount is due on August 16, 2021. All borrowings from the FHLBNY require security. For information on investments that are pledged as collateral for these borrowings, see Note 5. "Investments" above. (5) In July 2016, SICA borrowed $25 million from the FHLBNY. The unpaid principal amount accrues interest of 1.61%. The principal amount is due on July 21, 2021. (6) In February 2013, we issued $185 million of 5.875% Senior Notes due 2043. The notes are callable by us on or after February 8, 2018, at a price equal to 100% of their principal outstanding amount, plus accrued and unpaid interest to, but excluding, the date of redemption. A portion of the proceeds from this debt issuance was used to fully redeem the $100 million aggregate principal amount of our 7.5% Junior Subordinated Notes due 2066. Of the remaining net proceeds, $57.1 million was used to make capital contributions to the Insurance Subsidiaries, while the balance was used for general corporate purposes. There are no financial debt covenants to which we are required to comply in regards to these Senior Notes. (7) In November 2005, we issued $100 million of 6.70% Senior Notes due 2035. These notes were issued at a discount of $0.7 million resulting in an effective yield of 6.754%. Net proceeds of approximately $50 million were used to fund an irrevocable trust to provide for certain payment obligations in respect of our outstanding debt. The remainder of the proceeds was used for general corporate purposes. The agreements covering these notes contain a standard default cross-acceleration provision that provides the 6.70% Senior Notes will enter a state of default upon the failure to pay principal when due or upon any event or condition that results in an acceleration of principal of any other debt instrument in excess of $10 million that we have outstanding concurrently with the 6.70% Senior Notes. There are no financial debt covenants to which we are required to comply in regards to these notes. (8) In November 2004, we issued $50 million of 7.25% Senior Notes due 2034. These notes were issued at a discount of $0.1 million, resulting in an effective yield of 7.27%. We contributed $25 million of the bond proceeds to the Insurance Subsidiaries as capital. The remainder of the proceeds was used for general corporate purposes. The agreements covering these notes contain a standard default cross-acceleration provision that provides the 7.25% Senior Notes will enter a state of default upon the failure to pay principal when due or upon any event or condition that results in an acceleration of principal of any other debt instrument in excess of $10 million that we have outstanding concurrently with the 7.25% Senior Notes. There are no financial debt covenants to which we are required to comply in regards to these notes.

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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 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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