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Long-Term Debt
 6 Months Ended
Jun. 30, 2012
Long-Term Debt [Abstract]  
Long-Term Debt
J. Long-Term Debt

The carrying value of long-term debt consisted of the following (in millions):

 

                 
     June 30,
2012		     December 31,
2011		  

Direct obligations of AFG:

                

9-7/8% Senior Notes due June 2019

   $ 350     $ 350  

6-3/8% Senior Notes due June 2042

     230       —    

7% Senior Notes due September 2050

     132       132  

7-1/8% Senior Debentures due February 2034

     115       115  

Other

     3       3  
   

 

 

    

 

 

  
      830       600  
   

 

 

    

 

 

  

Subsidiaries:

                

Obligations of AAG Holding (guaranteed by AFG):

                

7-1/2% Senior Debentures due November 2033(*)

     112       112  

7-1/4% Senior Debentures due January 2034(*)

     86       86  

Notes payable secured by real estate due 2012 through 2016

     64       64  

Secured borrowings ($16 and $17 guaranteed by AFG)

     24       30  

National Interstate bank credit facility

     22       22  
   

 

 

    

 

 

  
      308       314  
   

 

 

    

 

 

  

Payable to Subsidiary Trusts:

                

AAG Holding Variable Rate Subordinated Debentures due May 2033

     20       20  
   

 

 

    

 

 

  
    $ 1,158     $ 934  
   

 

 

    

 

 

  

 

(*) Called for redemption on July 13, 2012 at par value.

Scheduled principal payments on debt for the balance of 2012 and the subsequent five years were as follows: 2012 — $28 million; 2013 — $20 million; 2014 — $2 million; 2015 — $14 million; 2016 — $45 million and 2017 — none.

As shown below (in millions), the majority of AFG’s long-term debt is unsecured obligations of the holding company and its subsidiaries:

 

                 
     June 30,
2012		     December 31,
2011		  

Unsecured obligations

   $ 1,070     $ 840  

Obligations secured by real estate

     64       64  

Other secured borrowings

     24       30  
   

 

 

    

 

 

  
    $ 1,158     $ 934  
   

 

 

    

 

 

  

AFG can borrow up to $500 million under its revolving credit facility which expires in August 2013. Amounts borrowed under this agreement bear interest at rates ranging from 1.75% to 3.00% (currently 2%) over LIBOR based on AFG’s credit rating. No amounts were borrowed under this facility at June 30, 2012.

 

In June 2012, AFG issued $230 million in 6-3/8% Senior Notes due 2042 and used the proceeds to redeem the outstanding AAG Holding Company, Inc. (a subsidiary of AFG) 7-1/2% Senior Debentures due 2033 and 7-1/4% Senior Debentures due 2034 at par value in July 2012.