MetLife 2010 Annual Report Download - page 67

recovery is limited to the amount of MetLife Bank’s liability under the advances agreement. MetLife Bank has received advances from the
FHLB of NY on both short- and long-term bases, with a total liability of $3.8 billion and $2.4 billion at December 31, 2010 and 2009,
respectively.
• The Company also had obligations under funding agreements with the FHLB of NY of $12.6 billion and $13.7 billion at December 31,
2010 and 2009, respectively, for MLIC, and with the Federal Home Loan Bank of Boston (“FHLB of Boston”) of $100 million and
$326 million at December 31, 2010 and 2009, respectively, for MICC. See Note 8 of the Notes to the Consolidated Financial
Statements. In September 2010, MetLife Investors Insurance Company and General American Life Insurance Company, subsidiaries of
MetLife, Inc., each became a member of the Federal Home Loan Bank of Des Moines (“FHLB of Des Moines”), and each purchased
$10 million of FHLB of Des Moines common stock. Membership in the FHLB of Des Moines provides an additional source of contingent
liquidity for the Company. There were no funding agreements with the FHLB of Des Moines at December 31, 2010.
• The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to
certain special purpose entities (“SPEs”) that have issued either debt securities or commercial paper for which payment of interest and
principal is secured by such funding agreements. During the years ended December 31, 2010, 2009 and 2008, the Company issued
$34.1 billion, $28.6 billion and $20.9 billion, respectively, and repaid $30.9 billion, $32.0 billion and $19.8 billion, respectively, of such
funding agreements. At December 31, 2010 and 2009, funding agreements outstanding, which are included in policyholder account
balances, were $27.2 billion and $23.3 billion, respectively.
• MLIC and MICC have each issued funding agreements to certain SPEs that have issued debt securities for which payment of interest
and principal is secured by such funding agreements, and such debt securities are also guaranteed as to payment of interest and
principal by the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the U.S. The obligations under these
funding agreements are secured by a pledge of certain eligible agricultural real estate mortgage loans and may, under certain
circumstances, be secured by other qualified collateral. The amount of the Company’s liability for funding agreements issued to such
SPEs was $2.8 billion and $2.5 billion at December 31, 2010 and 2009, respectively, which is included in policyholder account
balances. The obligations under these funding agreements are collateralized by designated agricultural real estate mortgage loans with
estimated fair values of $3.2 billion and $2.9 billion at December 31, 2010 and 2009, respectively.
Outstanding Debt. The following table summarizes the outstanding debt of the Company at:
2010 2009
December 31,
(In millions)
Short-termdebt ...................................................... $ 306 $ 912
Long-termdebt(1)..................................................... $20,766 $13,156
Collateralfinancingarrangements........................................... $ 5,297 $ 5,297
Juniorsubordinateddebtsecurities ......................................... $ 3,191 $ 3,191
(1) Excludes $6,820 million at December 31, 2010 of long-term debt relating to CSEs.
Debt Issuances and Other Borrowings. In connection with the financing of the Acquisition (see Note 2 of the Notes to the Consolidated
Financial Statements), in November 2010, MetLife, Inc. issued to ALICO Holdings $3,000 million in three series of debt securities (the
“Series C Debt Securities,” the “Series D Debt Securities” and the “Series E Debt Securities,” and, together, the “Debt Securities”), which
constitute a part of the MetLife, Inc. common equity units (the “Equity Units”) more fully described in Note 14 of the Notes to the Consolidated
Financial Statements. The Debt Securities 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.
In August 2010, in anticipation of the Acquisition, the Holding Company 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 semi-annually;
• $1,000 million senior notes due February 8, 2021, which bear interest at a fixed rate of 4.75%, payable semi-annually;
• $750 million senior notes due February 6, 2041, which bear interest at a fixed rate of 5.875%, payable semi-annually; 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, the Holding Company incurred $15 million of issuance costs which have been capitalized and included
inotherassets.Thesecostsarebeingamortizedoverthetermsoftheseniornotes.
In July 2009, the Holding Company issued $500 million of junior subordinated debt securities with a final maturity of August 2069. Interest
is payable semi-annually at a fixed rate of 10.75% up to, but not including, August 1, 2039, the scheduled redemption date. In the event the
debt securities are not redeemed on or before the scheduled redemption date, interest will accrue at an annual rate of 3-month LIBOR plus a
margin equal to 7.548%, payable quarterly in arrears. In connection with the offering, the Holding Company incurred $5 million of issuance
costs which have been capitalized and included in other assets. These costs are being amortized over the term of the securities. See Note 13
of the Notes to the Consolidated Financial Statements for a description of the terms of the junior subordinated debt securities.
In May 2009, the Holding Company issued $1.3 billion of senior notes due June 1, 2016. The notes bear interest at a fixed rate of 6.75%,
payable semi-annually. 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 2012 under the FDIC’s Temporary Liquidity
Guarantee 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.
64 MetLife, Inc.