MetLife 2009 Annual Report Download - page 178

Other Junior Subordinated Debt Securities
Other outstanding junior subordinated debt securities and trust securities which MetLife, Inc. will exchange for junior subordinated debt
securities prior to redemption or repayment are as follows:
Issuer Issue Date Face Value Interest Rate(2) Scheduled Redemption Date
Interest Rate
Subsequent to
Scheduled
Redemption
Date (3) Final Maturity 2009 2008
Carrying Value
at December 31,
(In millions) (In millions)
MetLife, Inc. . . . . . . . . . July 2009 $ 500 10.750% August 2039 LIBOR + 7.548% August 2069 $ 500 $ —
MetLife Capital
Trust X(1) . . . . . . . . . . April 2008 $ 750 9.250% April 2038 LIBOR + 5.540% April 2068 750 750
MetLife Capital
Trust IV(1) . . . . . . . . . . December 2007 $ 700 7.875% December 2037 LIBOR + 3.960% December 2067 694 694
MetLife, Inc. . . . . . . . . . December 2006 $1,250 6.400% December 2036 LIBOR + 2.205% December 2066 1,247 1,247
$3,191 $2,691
(1) MetLife Capital Trust X and MetLife Capital Trust IV are VIEs which are consolidated in the financial statements of the Company. The
securities issued by these entities are exchangeable surplus trust securities, which will be exchanged for a like amount of the Holding
Company’s junior subordinated debt securities on the scheduled redemption date; mandatorily under certain circumstances, and at any
time upon the Holding Company exercising its option to redeem the securities. The exchangeable surplus trust securities are classified as
junior subordinated debt securities for purposes of financial statement presentation.
(2) Prior to the scheduled redemption date, interest is payable semiannually in arrears.
(3) In the event the securities are not redeemed on or before the scheduled redemption date, interest will accrue after such date at an annual
rate of 3-month LIBOR plus a margin, payable quarterly in arrears.
In connection with each of the securities described above, the Holding Company may redeem or may cause the redemption of the
securities (i) in whole or in part, at any time on or after the date five years prior to the scheduled redemption date at their principal amount plus
accrued and unpaid interest to, but excluding, the date of redemption, or (ii) in certain circumstances, in whole or in part, prior to the date five
years prior to the scheduled redemption date at their principal amount plus accrued and unpaid interest to, but excluding, the date of
redemption or, if greater, a make-whole price. The Holding Company also has the right to, and in certain circumstances the requirement to,
defer interest payments on the securities for a period up to ten years. Interest compounds during such periods of deferral. If interest is
deferred for more than five consecutive years, the Holding Company is required to use proceeds from the sale of its common stock or
warrants on common stock to satisfy interest payment obligation. In connection with each of the securities described above, the Holding
Company entered into a replacement capital covenant (“RCC”). As part of the RCC, the Holding Company agreed that it will not repay,
redeem, or purchase the securities on or before a date ten years prior to the final maturity date of each issuance, unless, subject to certain
limitations, it has received proceeds during a specified period from the sale of specified replacement securities. The RCC will terminate upon
the occurrence of certain events, including an acceleration of the securities due to the occurrence of an event of default. The RCC is not
intended for the benefit of holders of the securities and may not be enforced by them. The RCC is for the benefit of holders of one or more
other designated series of the Holding Company’s indebtedness (which will initially be its 5.70% senior notes due June 2035). The Holding
Company also entered into a replacement capital obligation which will commence during the six month period prior to the scheduled
redemption date and under which the Holding Company must use reasonable commercial efforts to raise replacement capital to permit
repayment of the securities through the issuance of certain qualifying capital securities.
Issuance costs associated with the issuance of the securities of $5 million, $8 million and $10 million were incurred during the years ended
December 31, 2009, 2008 and 2007, respectively. These issuance costs have been capitalized, are included in other assets, and are
amortized over the period from the issuance date until the scheduled redemption date of the respective issuances. Interest expense on other
junior subordinated debt securities was $231 million, $186 million and $83 million for the years ended December 31, 2009, 2008 and 2007,
respectively.
14. Common Equity Units
In connection with financing the acquisition of The Travelers Insurance Company on July 1, 2005, the Holding Company distributed and sold 82.8 million
6.375% common equity units for $2,070 million in proceeds in a registered public offering on June 21, 2005. The common equity units consisted of interests in
trust preferred securities issued by MetLife Capital Trusts II and III, and stock purchase contracts issued by the Holding Company. The only assets of MetLife
Capital Trusts II and III were junior subordinated debt securities issued by the Holding Company. The common equity units ceased to exist upon the closing of the
remarketing of the underlying debt instruments and the settlement of the stock purchase contracts in August 2008 and February 2009. See Notes 13 and 18.
F-94 MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)