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Indebtedness

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Indebtedness

Indebtedness

The table below provides a summary of our outstanding debt at June 30, 2019 and December 31, 2018:

Outstanding Debt		Issuance Date		Maturity Date		Interest Rate			Original Amount				2019			Carry Value
($ in thousands)													Debt Discount and Unamortized Issuance Costs			June 30, 2019			December 31, 2018
Description
Long term
Issuance:
Senior Notes		3/1/2019		3/1/2049		5.375	%		$	300,000			9,141			290,859			—
Redemption:
Senior Notes		2/8/2013		2/9/2043		5.875	%		185,000				—			—			180,771
Other Outstanding:
FHLBI		12/16/2016		12/16/2026		3.03	%		60,000				—			60,000			60,000
FHLBNY		8/15/2016		8/16/2021		1.56	%		25,000				—			25,000			25,000
FHLBNY		7/21/2016		7/21/2021		1.61	%		25,000				—			25,000			25,000
Senior Notes		11/3/2005		11/1/2035		6.70	%		100,000				903			99,097			99,069
Senior Notes		11/16/2004		11/15/2034		7.25	%		50,000				287			49,713			49,700
Finance lease obligations1																1,109			—
Total long-term debt													10,331			550,778			439,540

¹ Concurrent with the adoption of ASU 2016-02 discussed in Note 2. "Adoption of Accounting Pronouncements," finance lease obligations are now captured in Long-term debt on our Consolidated Balance Sheets.

Short-Term Debt Activity

On March 7, 2019, Selective Insurance Company of America (“SICA”) borrowed short-term funds of $50 million from the FHLBNY at an interest rate of 2.64%. This borrowing was repaid on March 28, 2019.

Long-Term Debt Activity

In the first quarter of 2019, we issued $300 million of 5.375% Senior Notes due 2049 at a discount of $5.9 million which, when coupled with debt issuance costs of approximately $3.3 million, resulted in net proceeds from the offering of $290.8 million. The 5.375% Senior Notes will pay interest on March 1 and September 1 of each year, beginning on September 1, 2019. A portion of the proceeds from this debt issuance was used to fully redeem the $185 million aggregate principal amount of our 5.875% Senior Notes due 2043, with the remaining $106 million being used for general corporate purposes. The 5.875% Senior Notes had pre-tax debt retirement costs of $4.2 million, or $3.3 million after tax, which was recorded in Interest expense on the Consolidated Statements of Income in the first quarter of 2019.

For detailed information on our indebtedness, see Note 10. "Indebtedness" in Item 8. "Financial Statements and Supplementary Data." of our 2018 Annual Report.

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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://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 470
-URI http://asc.fasb.org/topic&trid=2208564

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