MetLife 2009 Annual Report Download - page 174

11. Long-term and Short-term Debt
Long-term and short-term debt outstanding is as follows:
Range Weighted Average Maturity 2009 2008
December 31,
Interest Rates
(In millions)
Senior notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.57%-7.71% 5.94% 2011-2035 $10,458 $ 7,660
Repurchase agreements . . . . . . . . . . . . . . . . . . . . 0.31%-4.90% 3.35% 2010-2014 1,846 1,062
Surplus notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.63%-7.88% 7.98% 2015-2025 698 698
Fixed rate notes . . . . . . . . . . . . . . . . . . . . . . . . . . 3.76%-8.56% 8.56% 2010 63 65
Other notes with varying interest rates . . . . . . . . . . . . 2.16%-8.00% 4.50% 2010-2016 120 134
Capitalleaseobligations..................... 35 48
Totallong-termdebt ....................... 13,220 9,667
Totalshort-termdebt....................... 912 2,659
Total................................ $14,132 $12,326
The aggregate maturities of long-term debt at December 31, 2009 for the next five years are $431 million in 2010, $1,358 million in 2011,
$1,506 million in 2012, $718 million in 2013, $416 million in 2014 and $8,789 million thereafter.
Repurchase agreements and capital lease obligations are collateralized and rank highest in priority, followed by unsecured senior debt
which consists of senior notes, fixed rate notes and other notes with varying interest rates, followed by subordinated debt which consists of
junior subordinated debt securities. Payments of interest and principal on the Company’s surplus notes, which are subordinate to all other
obligations at the operating company level and senior to obligations at the Holding Company, may be made only with the prior approval of the
insurance department of the state of domicile. Collateral financing arrangements are supported by either surplus notes of subsidiaries or
financing arrangements with the Holding Company and accordingly have priority consistent with other such obligations.
Certain of the Company’s debt instruments, credit facilities and committed facilities contain various administrative, reporting, legal and
financial covenants. The Company believes it was in compliance with all covenants at both December 31, 2009 and 2008.
Senior Notes
In May 2009, the Holding Company issued $1,250 million of senior notes due June 1, 2016. The notes bear interest at a fixed rate of
6.75%, payable semiannually. In connection with the offering, the Holding Company incurred $6 million of issuance costs which have been
capitalized and included in other assets. These costs are being amortized over the term of the notes.
In March 2009, the Holding Company issued $397 million of floating rate senior notes due June 29, 2012 under the FDIC Program. The
notes bear interest at a rate equal to three-month LIBOR, reset quarterly, plus 0.32%. The notes are not redeemable prior to their maturity. In
connection with the offering, the Holding Company incurred $15 million of issuance costs which have been capitalized and included in other
assets. These costs are being amortized over the term of the notes.
In February 2009, the Holding Company remarketed its existing $1,035 million 4.91% Series B junior subordinated debt securities as
7.717% senior debt securities, Series B, due 2019. In August 2008, the Holding Company remarketed its existing $1,035 million 4.82%
Series A junior subordinated debt securities as 6.817% senior debt securities, Series A, due 2018. Interest on both series of debt securities is
payable semiannually. The Series A and Series B junior subordinated debt securities were originally issued in 2005 in connection with the
common equity units. See Notes 13 and 14.
Repurchase Agreements with the Federal Home Loan Bank of New York
MetLife Bank is a member of the FHLB of NY and held $124 million and $89 million of common stock of the FHLB of NY at December 31,
2009 and 2008, respectively, which is included in equity securities. MetLife Bank has also entered into repurchase agreements with the FHLB
of NY whereby MetLife Bank has issued repurchase agreements in exchange for cash and for which the FHLB of NY has been granted a
blanket lien on certain of MetLife Bank’s residential mortgages, mortgage loans held-for-sale, commercial mortgages and mortgage-backed
securities to collateralize MetLife Bank’s obligations under the repurchase agreements. MetLife Bank maintains control over these pledged
assets, and may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining
qualified collateral is sufficient to satisfy the collateral maintenance level. The repurchase agreements and the related security agreement
represented by this blanket lien provide that upon any event of default by MetLife Bank, the FHLB of NY’s recovery is limited to the amount of
MetLife Bank’s liability under the outstanding repurchase agreements. The amount of MetLife Bank’s liability for repurchase agreements
entered into with the FHLB of NY was $2.4 billion and $1.8 billion at December 31, 2009 and 2008, respectively, which is included in long-
term debt and short-term debt depending upon the original tenor of the advance. During the years ended December 31, 2009, 2008 and
2007, MetLife Bank received advances related to long-term borrowings totaling $1,280 million, $220 million and $390 million, respectively,
from the FHLB of NY. MetLife Bank made repayments to the FHLB of NY of $497 million, $371 million and $175 million related to long-term
borrowings for the years ended December 31, 2009, 2008 and 2007, respectively. The advances on the repurchase agreements related to
both long-term and short-term debt were collateralized by residential mortgages, mortgage loans held-for-sale, commercial mortgages and
mortgage-backed securities with estimated fair values of $5.5 billion and $3.1 billion at December 31, 2009 and 2008, respectively.
Collateralized Borrowing from the Federal Reserve Bank of New York
MetLife Bank is a depository institution that is approved to use the Federal Reserve Bank of New York Discount Window borrowing
privileges and participate in the Federal Reserve Bank of New York Term Auction Facility. In order to utilize these facilities, MetLife Bank has
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MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)