MetLife 2010 Annual Report Download - page 195

(1) Excludes $6,820 million at December 31, 2010 of long-term debt relating to CSEs. See Note 3.
The aggregate maturities of long-term debt at December 31, 2010 for the next five years and thereafter are $1,405 million in 2011,
$1,520 million in 2012, $1,464 million in 2013, $1,653 million in 2014, $2,365 million in 2015 and $12,358 million thereafter.
Advances 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, 2010 and 2009.
Senior Notes — Senior Debt Securities Underlying Equity Units
In connection with the financing of the Acquisition (see Note 2) in November 2010, MetLife, Inc. issued to ALICO Holdings $3,000 million
(estimated fair value of $3,011 million) in three series of Debt Securities, which constitute a part of the Equity Units more fully described in
Note 14. The Debt Securities (Series C, D and E) are subject to remarketing, initially bear interest at 1.56%, 1.92% and 2.46%, respectively
(an average rate of 1.98%), and carry initial maturity dates of June 15, 2023, June 15, 2024 and June 15, 2045, respectively. The interest
rates will be reset in connection with the successful remarketings of the Debt Securities. Prior to the first scheduled attempted remarketing of
the Series C Debt Securities, such Debt Securities will be divided into two tranches equal in principal amount with maturity dates of June 15,
2018 and June 15, 2023. Prior to the first scheduled attempted remarketing of the Series E Debt Securities, such Debt Securities will be
divided into two tranches equal in principal amount with maturity dates of June 15, 2018 and June 15, 2045.
Senior Notes — Other
In August 2010, in anticipation of the Acquisition, MetLife, Inc. issued senior notes as follows:
• $1,000 million senior notes due February 6, 2014, which bear interest at a fixed rate of 2.375%, payable semiannually;
• $1,000 million senior notes due February 8, 2021, which bear interest at a fixed rate of 4.75%, payable semiannually;
• $750 million senior notes due February 6, 2041, which bear interest at a fixed rate of 5.875%, payable semiannually; and
• $250 million floating rate senior notes due August 6, 2013, which bear interest at a rate equal to three-month LIBOR, reset quarterly,
plus 1.25%, payable quarterly.
In connection with these offerings, MetLife, Inc. incurred $15 million of issuance costs which have been capitalized and included in other
assets. These costs are being amortized over the terms of the senior notes.
In May 2009, MetLife, Inc. 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, MetLife, Inc. 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.
Thesecostsarebeingamortizedoverthetermofthenotes.
In February 2009, MetLife, Inc. 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 certain common
equity units. See Notes 13 and 14.
Advances from the Federal Home Loan Bank of New York
MetLife Bank is a member of the FHLB of NY and held $187 million and $124 million of common stock of the FHLB of NY at December 31,
2010 and 2009, respectively, which is included in equity securities. MetLife Bank has also entered into advances agreements with the FHLB
of NY whereby MetLife Bank has received cash advances and under which the FHLB of NY has been granted a blanket lien on certain of
MetLife Bank’s residential mortgage loans, mortgage loans held-for-sale, commercial mortgage loans and mortgage-backed securities to
collateralize MetLife Bank’s repayment obligations. 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 advances agreements. The amount of MetLife Bank’s liability for advances from the FHLB of NY
was $3.8 billion and $2.4 billion at December 31, 2010 and 2009, 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, 2010, 2009 and 2008, MetLife Bank received
advances related to long-term borrowings totaling $2,103 million, $1,280 million and $220 million, respectively, from the FHLB of NY. MetLife
Bank made repayments to the FHLB of NY of $349 million, $497 million and $371 million related to long-term borrowings for the years ended
December 31, 2010, 2009 and 2008, respectively. The advances related to both long-term and short-term debt were collateralized by
residential mortgage loans, mortgage loans held-for-sale, commercial mortgage loans and mortgage-backed securities with estimated fair
values of $7.8 billion and $5.5 billion at December 31, 2010 and 2009, 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. In order to utilize these privileges, MetLife Bank has pledged qualifying loans and investment securities to the Federal Reserve
Bank of New York as collateral. MetLife Bank had no liability for advances from the Federal Reserve Bank of New York at both December 31,
2010 and 2009. The estimated fair value of loan and investment security collateral pledged by MetLife Bank to the Federal Reserve Bank of
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MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)