4. Debt

Debt consists of the following:


	March 31,			December 31,
*(in millions)*	2013			2012
Senior debentures maturing June 15, 2021	$	300.0		$	300.0
Senior debentures maturing March 1, 2020		200.0			200.0
Senior debentures maturing October 15, 2025		120.9			120.9
Subordinated debentures maturing March 30, 2053		175.0			—
Subordinated debentures maturing February 3, 2027		59.7			59.7
FHLBB borrowings (secured)		125.0			171.3

Total principal debt	$	980.6		$	851.9
Unamortized debt discount		(2.5	)		(2.5	)

Total	$	978.1		$	849.4

On March 20, 2013, the Company issued $175.0 million aggregate principal amount of 6.35% subordinated unsecured debentures due March 30, 2053. These debentures pay interest quarterly. The Company may redeem these debentures in whole at any time, or in part from time to time, on or after March 30, 2018, at a redemption price equal to their principal amount plus accrued and unpaid interest. If the debentures are not redeemed in whole, at least $25.0 million aggregate principal amount of the debentures must remain outstanding. In addition, in certain circumstances, the Company may redeem the debentures in whole, but not in part, prior to March 30, 2018.

In 2009, the Company received a $125.0 million Federal Home Loan Bank of Boston (“FHLBB”) advance through the Company’s membership in the FHLBB. This collateralized advance bears interest at a fixed rate of 5.50% per annum over a twenty-year term. In July 2010, the Company committed to an additional $46.3 million of FHLBB advances. These advances were drawn in several increments from July 2010 to January 2012 and carried fixed interest rates with a weighted average of 3.88%. In January 2013, the Company repaid the $46.3 million of FHLBB advances plus prepayment fees of $7.8 million for a total payment of $54.1 million. These advances would have matured on July 30, 2020.

As collateral to FHLBB, Hanover Insurance pledged government agency securities with a fair value of $145.3 million and $200.8 million, for the aggregate borrowings of $125.0 million and $171.3 million as of March 31, 2013 and December 31, 2012, respectively. The amount of required collateral decreased in conjunction with the repayment of the $46.3 million of FHLBB advances. The fair value of the collateral pledged must be maintained at certain specified levels of the borrowed amount, which can vary depending on the type of assets pledged. If the fair value of this collateral declines below these specified levels, Hanover Insurance would be required to pledge additional collateral or repay outstanding borrowings. Hanover Insurance is permitted to voluntarily repay the outstanding borrowings at any time, subject to a repayment fee. As a requirement of membership in the FHLBB, Hanover Insurance maintains a certain level of investment in FHLBB stock. Total holdings of FHLBB stock were $9.3 million and $9.7 million at March 31, 2013 and December 31, 2012, respectively.

At March 31, 2013, the Company was in compliance with the covenants associated with all of its debt indentures and credit arrangements.