MetLife 2008 Annual Report Download - page 65

Credit Facilities. The Holding Company and MetLife Funding entered into a $2,850 million credit agreement with various financial
institutions, the proceeds of which are available to be used for general corporate purposes, to support their commercial paper programs
and for the issuance of letters of credit. All borrowings under the credit agreement must be repaid by June 2012, except that letters of
credit outstanding upon termination may remain outstanding until June 2013. The borrowers and the lenders under this facility may agree to
extend the term of all or part of the facility to no later than June 2014, except that letters of credit outstanding upon termination may remain
outstanding until June 2015. Total fees associated with these credit facilities were $17 million, of which $11 million related to deferred
amendment fees for the year ended December 31, 2008.
At December 31, 2008, $2.3 billion of letters of credit have been issued under these unsecured credit facilities on behalf of the Holding
Company.
Management has no reason to believe that its lending counterparties are unable to fulfill their respective contractual obligations. See
“— The Company — Liquidity and Capital Sources — Credit Facilities.”
Committed Facilities. The Holding Company maintains committed facilities aggregating $11.5 billion at December 31, 2008. When
drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements as specified below. The facilities
are used for collateral for certain of the Company’s insurance liabilities. Management has no reason to believe that its lending counter-
parties are unable to fulfill their contractual obligations. See “— The Company — Liquidity and Capital Sources — Committed Facilities.”
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. . . . . . . . . . . . . . . . . . . . . . . . August 2009 (1) $ 500 $ — $ 500 $ — —
Exeter Reassurance Company Ltd., MetLife,
Inc., & Missouri Reinsurance (Barbados),
Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . June 2016 (2) 500 — 490 10 7
Exeter Reassurance Company Ltd. . . . . . . . . December 2027 (3),(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 (3),(6) 2,896 — 1,359 1,537 29
MetLife Reinsurance Company of Vermont &
MetLife, Inc. . . . . . . . . . . . . . . . . . . . . . . September 2038 (3),(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. 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) 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.
(3) The Holding Company is a guarantor under this agreement.
(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, MetLife Reinsurance Company of South Carolina 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 Reassurance Company Ltd. 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
MLI-USA in December 2007. MLI-USA immediately thereafter entered into a new reinsurance agreement with MetLife Reinsurance
Company of Vermont. 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.
62 MetLife, Inc.