Debt

12 Months Ended

Dec. 31, 2011

Debt [Abstract]

Debt

Note 11. Debt

December 31, 2011	Principal			Unamortized Discount		Net			Short Term Debt		Long Term Debt
(In millions)
Loews Corporation	$	700		$	6	$	694				$	694
CNA Financial		2,625			17		2,608		$	83		2,525
Diamond Offshore		1,500			12		1,488					1,488
HighMount		700					700					700
Boardwalk Pipeline		3,408			10		3,398					3,398
Loews Hotels		213					213			5		208
Elimination of intercompany debt		(100	)				(100	)				(100	)
Total	$	9,046		$	45	$	9,001		$	88	$	8,913

December 31	2011			2010
(In millions)
Loews Corporation (Parent Company):
Senior:
8.9% debentures due 2011 (effective interest rate of 9.0%) (authorized, $175)				$	175
5.3% notes due 2016 (effective interest rate of 5.4%) (authorized, $400)	$	400			400
6.0% notes due 2035 (effective interest rate of 6.2%) (authorized, $300)		300			300
CNA Financial:
Senior:
6.0% notes due 2011 (effective interest rate of 6.1%) (authorized, $400)					400
8.4% notes due 2012 (effective interest rate of 8.6%) (authorized, $100)		70			70
5.9% notes due 2014 (effective interest rate of 6.0%) (authorized, $549)		549			549
6.5% notes due 2016 (effective interest rate of 6.6%) (authorized, $350)		350			350
7.0% notes due 2018 (effective interest rate of 7.1%) (authorized, $150)		150			150
7.4% notes due 2019 (effective interest rate of 7.5%) (authorized, $350)		350			350
5.9% notes due 2020 (effective interest rate of 6.0%) (authorized, $500)		500			500
5.8% notes due 2021 (effective interest rate of 5.9%) (authorized, $400)		400
7.3% debentures due 2023 (effective interest rate of 7.3%) (authorized, $250)		243			243
5.1% debentures due 2034 (effective interest rate of 5.1%) (authorized, $31)					31
Other senior debt (effective interest rates approximate 2.9% and 4.6%)		13			23
Diamond Offshore:
Senior:
5.2% notes due 2014 (effective interest rate of 5.2%) (authorized, $250)		250			250
4.9% notes due 2015 (effective interest rate of 5.0%) (authorized, $250)		250			250
5.9% notes due 2019 (effective interest rate of 6.0%) (authorized, $500)		500			500
5.7% notes due 2039 (effective interest rate of 5.8%) (authorized, $500)		500			500
HighMount:
Senior:
Variable rate term loans due 2012 (effective interest rate of 5.7%)					1,100
Variable rate credit facility due 2016 (effective interest rate of 3.4%)		700
Boardwalk Pipeline:
Senior:
Variable rate revolving credit facility due 2012 (effective interest rate of 0.5%)		458			703
8.0% subordinated loan due 2012		100			100
Variable rate term loan due 2016 (effective interest rate of 1.8%)		200
5.8% notes due 2012 (effective interest rate of 6.0%) (authorized, $225)		225			225
5.5% notes due 2013 (effective interest rate of 5.8%) (authorized, $250)					250
4.6% notes due 2015 (effective interest rate of 5.1%) (authorized, $250)		250			250
5.1% notes due 2015 (effective interest rate of 5.2%) (authorized, $275)		275			275
5.9% notes due 2016 (effective interest rate of 6.0%) (authorized, $250)		250			250
5.5% notes due 2017 (effective interest rate of 5.6%) (authorized, $300)		300			300
6.3% notes due 2017 (effective interest rate of 6.4%) (authorized, $275)		275			275
5.2% notes due 2018 (effective interest rate of 5.4%) (authorized, $185)		185			185
5.8% notes due 2019 (effective interest rate of 5.9%) (authorized, $350)		350			350
4.5% notes due 2021 (effective interest rate of 5.0%) (authorized, $440)		440
7.3% debentures due 2027 (effective interest rate of 8.1%) (authorized, $100)		100			100
Loews Hotels:
Senior debt, principally mortgages (effective interest rates approximate 3.9% and 4.1%)		213			220
Elimination of intercompany debt		(100	)		(100	)
		9,046			9,524
Less unamortized discount		45			47
Debt	$	9,001		$	9,477

CNA has a $250 million credit agreement with a syndicate of banks and other lenders. The credit agreement term extends to August 1, 2012 and is intended to be used for general corporate purposes. Borrowings under the revolving credit facility bear interest at the London Interbank Offered Rate ("LIBOR") plus CNA's credit risk spread. Under the credit agreement, CNA is required to pay certain fees, including a facility fee and a utilization fee, both of which would adjust automatically in the event of a change in CNA's financial ratings. The credit agreement includes covenants regarding maintenance of a minimum consolidated net worth and a specified ratio of consolidated indebtedness to consolidated total capitalization. There is no outstanding amount due under this credit agreement as of December 31, 2011, leaving the full limit of $250 million available as of December 31, 2011. CNA's remaining debt obligations contain customary covenants for investment grade insurers. As of December 31, 2011, CNA was in compliance with all covenants.

In February of 2011, CNA issued $400 million aggregate principal amount of 5.75% ten-year senior notes due August 15, 2021. CNA used the net proceeds to redeem the outstanding $400 million aggregate principal amount of its 6.0% senior notes due in 2011 plus required interest and payments.

In November of 2011, CNA redeemed the outstanding $31 million plus accrued and unpaid interest of the CNA Surety debenture originally due April 29, 2034.

In December of 2011, HighMount entered into a credit agreement with a syndicate of banks for a $600 million variable rate term loan and a $250 million revolving credit facility. The credit agreement is for a period of five years and bears interest at LIBOR plus an applicable margin. As of December 31, 2011, HighMount had $100 million outstanding under the revolving credit facility. The proceeds from the loan plus $400 million of cash received from the Company were utilized to repay the $1.1 billion of variable rate term loans due in July 2012.

HighMount has entered into interest rate swaps for a notional amount of $300 million to hedge its exposure to fluctuations in LIBOR. These swaps effectively fix the interest rate on the hedged portion of the term loan to 1.1% plus an applicable margin. Among other customary covenants, HighMount must meet a maximum predetermined total debt to capitalization ratio and a minimum present value of proved natural gas and oil reserves to total debt ratio. At December 31, 2011, HighMount was in compliance with all of its debt covenants under the credit agreement.

Boardwalk Pipeline maintains a $950 million revolving credit facility under which Boardwalk Pipeline and its operating subsidiaries each may borrow funds, up to applicable sub-limits. Borrowings under the credit facility bear interest at a rate per annum equal to at its election, either; (i) the higher of the prime rate or the Federal funds rate plus 50 basis points or (ii) LIBOR plus an applicable margin. Among other customary covenants, each of the borrowers must maintain a minimum ratio, as of the last day of each fiscal quarter, of consolidated total debt to consolidated earnings before interest, income taxes and depreciation and amortization (as defined in the agreement), measured for the preceding twelve months, of not more than five to one.

As of December 31, 2011, Boardwalk Pipeline had $458 million of loans outstanding under its revolving credit facility with a weighted-average interest rate on the borrowings of 0.5% and had no letters of credit issued. The revolving credit facility has a maturity date of June 29, 2012, however, all outstanding revolving loans on such date may be converted to term loans having a maturity date of June 29, 2013. As of December 31, 2011, Boardwalk Pipeline and its operating subsidiaries were in compliance with all covenant requirements under the credit facility.

In January and June of 2011, Boardwalk Pipeline issued $325 million and $115 million aggregate principal amount of 4.5% senior notes due February 1, 2021. The net proceeds of the offerings were used to reduce borrowings under the revolving credit facility and redeem 5.5% Notes due April 1, 2013.

In December of 2011, HP Storage entered into a credit agreement for a $200 million variable rate term loan due December 1, 2016. The loan bears interest at the Eurodollar rate plus an applicable margin and contains customary covenants including specified leveraged ratios. The proceeds from the loan were utilized to fund the acquisition of HP Storage. As of December 31, 2011, HP Storage was in compliance with all covenants under the credit agreement.

At December 31, 2011, the aggregate of long term debt maturing in each of the next five years is approximately as follows: $88 million in 2012, $689 million in 2013, $819 million in 2014, $948 million in 2015, $1.9 billion in 2016 and $4.6 billion thereafter. Long term debt is generally redeemable in whole or in part at the greater of the principal amount or the net present value of scheduled payments discounted at the specified treasury rate plus a margin.