MetLife 2008 Annual Report Download - page 56

for collateral for certain of the Company’s insurance liabilities. Management has no reason to believe that its lending counterparties are
unable to fulfill their contractual obligations.
Total fees associated with these committed facilities were $35 million, of which $13 million related to deferred amendment fees for the
year ended December 31, 2008. Information on committed facilities at December 31, 2008 is as follows:
Account Party/Borrower(s) Expiration Capacity Drawdowns
Letter of
Credit
Issuances Unused Commitments Maturity (Years)
(In millions)
MetLife,Inc. ....................... August2009 (1) $ 500 $ — $ 500 $ — —
Exeter Reassurance Company Ltd., MetLife, Inc., &
MissouriReinsurance(Barbados),Inc.......... June2016 (3) 500 — 490 10 7
Exeter Reassurance Company Ltd. . . . . . . . . December 2027 (2),(4) 650 — 410 240 19
MetLife Reinsurance Company of South
Carolina & MetLife, Inc. . . . . . . . . . . . . . . . June 2037 (5) 3,500 2,692 — 808 29
MetLife Reinsurance Company of Vermont &
MetLife, Inc. . . . . . . . . . . . . . . . . . . . . . . December 2037 (2),(6) 2,896 — 1,359 1,537 29
MetLife Reinsurance Company of Vermont &
MetLife, Inc. . . . . . . . . . . . . . . . . . . . . . . September 2038 (2),(7) 3,500 — 1,500 2,000 29
Total ........................... $11,546 $2,692 $4,259 $4,595
(1) In December 2008, the Holding Company entered into an amended and restated one year $500 million letter of credit facility (dated as of
August 2008 and amended and restated at December 31, 2008), with an unaffiliated financial institution, Exeter Reassurance Company,
Ltd. (“Exeter”) is a co-applicant under this letter of credit facility. This letter of credit facility matures in August 2009, except that letters of
credit outstanding upon termination may remain outstanding until August 2010. Fees for this agreement include a margin of 2.25% and a
utilization fee of 0.05%, as applicable. The Holding Company incurred amendment costs of $1.3 million related to the $500 million
amended and restated letter of credit facility, which has been capitalized and included in other assets. These costs will be amortized over
the term of the agreement.
(2) The Holding Company is a guarantor under this agreement.
(3) Letters of credit and replacements or renewals thereof issued under this facility of $280 million, $10 million and $200 million are set to
expire no later than December 2015, March 2016 and June 2016, respectively.
(4) In December 2008, Exeter, as borrower, and the Holding Company, as guarantor, entered into an amendment of an existing credit
agreement with an unaffiliated financial institution. Issuances under this facility are set to expire in December 2027. Exeter incurred
amendment costs of $1.6 million related to the amendment of the existing credit agreement, which have been capitalized and included in
other assets. These costs will be amortized over the term of the agreement.
(5) In May 2007, MRSC, a wholly-owned subsidiary of the Company, terminated the $2.0 billion amended and restated five-year letter of
credit and reimbursement agreement entered into among the Holding Company, MRSC and various financial institutions on April 25,
2005. In its place, the Company entered into a 30-year collateral financing arrangement as described in Note 11 of the Notes to the
Consolidated Financial Statements, which may be extended by agreement of the Company and the financial institution on each
anniversary of the closing of the facility for an additional one-year period. At December 31, 2008, $2.7 billion had been drawn upon
under the collateral financing arrangement.
(6) In December 2007, Exeter terminated four letters of credit, with expirations from March 2025 through December 2026, which were issued
under a letter of credit facility with an unaffiliated financial institution in an aggregate amount of $1.7 billion. The letters of credit had served
as collateral for Exeter’s obligations under a reinsurance agreement that was recaptured by MetLife Investors USA Insurance Company
(“MLI-USA”) in December 2007. MLI-USA immediately thereafter entered into a new reinsurance agreement with MetLife Reinsurance
Company of Vermont (“MRV”). To collateralize its reinsurance obligations, MRV and the Holding Company entered into a 30-year,
$2.9 billion letter of credit facility with an unaffiliated financial institution.
(7) In September 2008, MRV and the Holding Company entered into a 30-year, $3.5 billion letter of credit facility with an unaffiliated financial
institution. These letters of credit serve as collateral for MRV’s obligations under a reinsurance agreement.
Letters of Credit. At December 31, 2008, the Company had outstanding $6.6 billion in letters of credit from various financial
institutions of which $4.3 billion and $2.3 billion were part of committed and credit facilities, respectively. As commitments associated with
letters of credit and financing arrangements may expire unused, these amounts do not necessarily reflect the Company’s actual future cash
funding requirements.
Covenants. Certain of the Company’s debt instruments, credit facilities and committed facilities contain various administrative,
reporting, legal and financial covenants. The Company believes it is in compliance with all covenants at December 31, 2008 and 2007.
Liquidity and Capital Uses
Debt Repayments. On October 31, 2007, the Company redeemed $125 million of 8.525% GenAmerica Capital I Capital Securities
which were due to mature on June 30, 2027. As a result of this repayment, the Company recognized additional interest expense of
$10 million.
During the years ended December 31, 2008, 2007 and 2006, MetLife Bank made repayments of $371 million, $175 million, and
$117 million, respectively, to the FHLB of NY related to long-term borrowings. During the year ended December 31, 2008, MetLife Bank
made repayments of $4.6 billion to the FHLB of NY and $650 million to the Federal Reserve Bank of New York related to short-term
borrowings. See “Liquidity and Capital Sources — Debt Issuances and Other Borrowings” for further information.
The Holding Company repaid a $500 million 5.25% senior note which matured in December 2006.
53MetLife, Inc.