Notes Payable and Debt and Financing Arrangements

(a) Notes Payable and Debt

The following table presents the Company's outstanding notes payable and debt at September 30, 2017 and December 31, 2016:



(U.S. dollars in thousands)	September 30, 2017				December 31, 2016
(U.S. dollars in thousands)	Commitment/ Debt (1)		In Use/ Outstanding (2)		Commitment/ Debt (1)		In Use/ Outstanding (2)
Debt:
2.30% Senior Notes due December 2018	$	300,000	$	299,189	$	300,000	$	298,686
5.75% Senior Notes due October 2021	400,000		398,277		400,000		397,953
6.375% Senior Notes due November 2024	350,000		349,221		350,000		349,139
4.45% Subordinated Notes due March 2025	500,000		493,936		500,000		493,329
6.25% Senior Notes due May 2027	325,000		323,492		325,000		323,375
5.25% Senior Notes due December 2043	300,000		296,526		300,000		296,427
5.5% Subordinated Notes due March 2045	483,305		472,736		500,000		488,768
3.25% Subordinated Notes due June 2047	587,150		576,686		—		—
Total debt carrying value	$	3,245,455	$	3,210,063	$	2,675,000	$	2,647,677

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(1)

Excluded from the table are certain credit facilities under which the Company was permitted to utilize up to $750.0 million at September 30, 2017 and $1.0 billion at December 31, 2016, for revolving loans to support general operating and financing needs. At September 30, 2017 and December 31, 2016, $2 million and $245 million, respectively, were utilized under these facilities to issue letters of credit, leaving $748.0 million and $755.0 million, respectively, available to support other operating and financing needs.

(2) "In Use/Outstanding" data represent September 30, 2017 and December 31, 2016 accreted values.

All outstanding debt of the Company at September 30, 2017 and December 31, 2016 was issued by XLIT, a 100% owned subsidiary of XL Group. XLIT's outstanding debt, other than the Senior Notes due 2024 and due 2027, is fully and unconditionally guaranteed by XL Group. See Note 16, "Guarantor Financial Information," for condensed comparative financial information of XL Group and XLIT for the periods ended September 30, 2017 and December 31, 2016.

The ability of XLIT, like that of the Company, to obtain funds from its subsidiaries to satisfy any of its obligations, including under guarantees, is subject to certain contractual restrictions, applicable laws and statutory requirements of the various countries in which the subsidiaries operate, including, among others, Bermuda, the United States, Ireland, Switzerland and the United Kingdom. For details of the required statutory capital and surplus for the principal operating subsidiaries of the Company, see Item 8, Note 24, "Statutory Financial Data," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.

On June 29, 2017, XLIT issued €500 million ($568.8 million) of fixed to floating rate subordinated notes due June 2047, with a fixed coupon of 3.25% for a period of ten years, then a floating rate of three-month EURIBOR plus 2.90% thereafter. The notes are listed on the New York Stock Exchange. The notes were issued at 99.054% of the face amount and net proceeds were $558.3 million. Related expenses of the offering amounted to approximately $10.5 million. These costs were deferred and will be amortized over the expected life of the subordinated notes.

On July 7, 2017, the Company repurchased through a tender offer and canceled outstanding 5.5% Subordinated Notes due 2045 issued by XLIT with a net carrying value of $16.3 million for $17.9 million, inclusive of transaction costs. As a result of these repurchases, the Company recorded a loss of approximately $1.6 million through "Extinguishment of debt" and interest expense of $0.3 million in the Unaudited Consolidated Statements of Income.

As a result of the Allied Acquisition described in Note 2(d), "Acquisitions and Disposals - Allied Acquisition," the Company assumed, and subsequently redeemed on June 15, 2016, $8.2 million of trust preferred securities, due in 2035 and bearing a floating interest rate, adjustable quarterly, at three-month LIBOR plus 3.75%.

XLIT and the Company were in compliance with all covenants at September 30, 2017, and XLIT and the Company currently remain in compliance with all covenants.

(b) Letter of Credit Facilities and Other Sources of Collateral

The Company has letter of credit ("LOC") facilities provided on both syndicated and bilateral bases from commercial banks. These facilities are utilized primarily to support non-admitted insurance and reinsurance operations in the U.S. and capital requirements at Lloyd's.

The following table presents the Company's sixteen and fifteen letter of credit facilities and revolving credit facilities at September 30, 2017 and December 31, 2016, respectively:



(U.S. dollars in thousands)	September 30, 2017				December 31, 2016
Facility Name:	Commitment/ Debt		In Use/ Outstanding		Commitment/ Debt		In Use/ Outstanding
2015 Citi Facility	$	—	$	—	$	250,000	$	245,000
Goldman Facility	—		—		200,000		200,000
2016 Credit Agricole Facility I	125,000		125,000		125,000		125,000
2016 Credit Agricole Facility II	125,000		125,000		125,000		125,000
2017 Commonwealth Bank Facility	215,000		215,000		—		—
2017 Credit Suisse Facility	100,000		100,000		—		—
FAL Facility I	125,000		125,000		125,000		125,000
FAL Facility II	125,000		125,000		125,000		125,000
FAL Facility III	125,000		125,000		125,000		125,000
FAL Facility IV	125,000		125,000		125,000		125,000
Syndicated Unsecured Facility (1)	750,000		2,000		750,000		—
Syndicated Secured Facility (1)	750,000		553,291		750,000		531,962
2017 Commerzbank Facility	100,000		100,000		—		—
CICL Facility	190,000		179,440		180,000		159,207
Citi EU Facility	600,000		104,252		600,000		84,641
London Market Facility	250,000		125,467		250,000		117,063
CRCH Facility	270,000		265,553		250,000		245,733
Syndicate 2003 Facility	14,062		14,044		11,687		11,687
Total LOC facilities	$	3,989,062	$	2,409,047	$	3,991,687	$	2,345,293

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(1)	The Company has the option to increase the size of the Syndicated Secured and Unsecured Facilities by an aggregate of $500 million.

At September 30, 2017 and December 31, 2016, the Company had 51.6% and 48.6%, respectively, of these credit facilities collateralized by certain assets from the Company's investment portfolio.

Commonwealth Bank Facility

On June 19, 2017, the Company entered into a new credit agreement with Commonwealth Bank of Australia, as administrative agent and issuing lender ("2017 Commonwealth Bank Facility"). The capacity available under this standby letter of credit is $215 million. The commitments under the 2017 Commonwealth Bank Facility expire on, and such credit facility is available until, the earlier of (i) September 15, 2020 and (ii) the date of termination in whole of the commitment upon an optional termination or reduction of the commitment by the account party or upon the occurrence of certain events of default.

Credit Suisse Bank Facility

On September 15, 2017, the Company entered into a new credit agreement with Credit Suisse Bank, as administrative agent and issuing lender ("2017 Credit Suisse Facility"). The capacity available under this standby letter of credit is $100 million. The commitments under the 2017 Credit Suisse Facility expire on, and such credit facility is available until, the earlier of (i) June 19, 2020 and (ii) the date of termination in whole of the commitment upon an optional termination or reduction of the commitment by the account party or upon the occurrence of certain events of default.

Commerzbank Bank Facility

On September 15, 2017, the Company entered into a new credit agreement with Commerzbank AG, as administrative agent and issuing lender ("2017 Commerzbank Facility"). The capacity available under this standby letter of credit is $100 million. The commitments under the 2017 Commerzbank Facility expire on, and such credit facility is available until, the earlier of (i) September 15, 2022 and (ii) the date of termination in whole of the commitment upon an optional termination or reduction of the commitment by the account party or upon the occurrence of certain events of default.

For details regarding the rest of the Company's facilities, see Item 8, Note 14(b), "Notes Payable and Debt and Financing Arrangements - Letter of Credit Facilities and Other Sources of Collateral," to the Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016.