XML 24 R9.htm IDEA: XBRL DOCUMENT v3.3.1.900
Debt
12 Months Ended
Dec. 31, 2015
Debt Disclosure [Abstract]  
Debt
Debt - Consolidated debt of Old Republic and its subsidiaries is summarized below:
December 31:
 
2015
 
2014
 
 
Carrying
Amount
 
Fair
Value
 
Carrying
Amount
 
Fair
Value
3.75% Convertible Senior Notes due 2018
 
$
550.0

 
$
709.5

 
$
550.0

 
$
640.7

4.875% Senior Notes due 2024
 
400.0

 
404.6

 
400.0

 
418.9

ESSOP debt with an average yield of 3.69%
 
 
 
 
 
 
 
 
and 3.66%, respectively
 
11.7

 
11.7

 
15.0

 
15.0

Total debt
 
$
961.7

 
$
1,125.8

 
$
965.0

 
$
1,074.7



On September 23, 2014, the Company completed a public offering of $400.0 aggregate principal amount of Senior Notes. The notes bear interest at a rate of 4.875% per year and mature on October 1, 2024.

The Company completed a public offering of $550.0 aggregate principal amount of Convertible Senior Notes in early March, 2011. The notes bear interest at a rate of 3.75% per year, mature on March 15, 2018, and are convertible at any time prior to maturity by the holder into 64.3407 shares (subject to periodic adjustment under certain circumstances) of common stock per one thousand dollar note.

Scheduled maturities of the above debt at the respective year ends are as follows: 2016: $3.5; 2017: $3.9; 2018: $554.2; 2019: $-; 2020 and after: $400.0. During 2015, 2014 and 2013, $42.9, $28.3 and $23.1, respectively, of interest expense on debt was charged to consolidated operations.

Old Republic's 3.75% Convertible Senior Notes and 4.875% Senior Notes ("the Notes") contain provisions defining certain events of default, among them a court ordered proceeding due to the insolvency of a Significant Subsidiary. The Notes define Significant Subsidiary in accordance with the paragraph (w) of Rule 1-02 of the SEC's Regulation S-X. The Company's flagship mortgage guaranty insurance carrier, RMIC qualifies as a Significant Subsidiary for purposes of the Notes. If RMIC were to become statutorily impaired, its insolvency could trigger a receivership proceeding which, in turn could ultimately result in an event of default. If this were to occur, the outstanding principal of the Notes could become immediately due and payable. Management believes the Final Order by the North Carolina Department of Insurance to RMIC has precluded such an event of default from occurring in the foreseeable future. Moreover, RMIC was statutorily solvent at December 31, 2015 and management has every expectation that its solvent state is likely to prevail. RMIC is expected to be an increasingly less significant subsidiary over time as its in force business declines.

Fair Value Measurements - The Company utilizes indicative market prices, which incorporate recent actual market transactions and current bid/ask quotations to estimate the fair value of outstanding debt securities that are classified within Level 2 of the fair value hierarchy as presented below. The Company uses an internally generated interest yield market matrix table, which incorporates maturity, coupon rate, credit quality, structure and current market conditions to estimate the fair value of its outstanding debt securities that are classified within Level 3.

The following table shows a summary of financial liabilities disclosed, but not carried, at fair value, segregated among the various input levels described in Note 1(d) above:
 
 
Carrying
 
Fair
 
 
 
 
Value
 
Value
 
Level 1
 
Level 2
 
Level 3
Financial Liabilities:
 
 
 
 
 
 
 
 
 
 
Debt:
 
 
 
 
 
 
 
 
 
 
December 31, 2015
 
$
961.7

 
$
1,125.8

 
$

 
$
1,114.1

 
$
11.7

December 31, 2014
 
$
965.0

 
$
1,074.7

 
$

 
$
1,059.7

 
$
15.0