MetLife 2012 Annual Report Download - page 171

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
12. Long-term and Short-term Debt
Long-term and short-term debt outstanding was as follows:
Interest Rates (1)
Range Weighted Average Maturity
December 31,
2012 2011
(In millions)
Senior notes ..................................................... 0.79% - 7.72% 4.83% 2013 - 2045 $15,669 $15,666
Advances agreements .............................................. 0.23% - 4.86% 2.33% 2012 — 4,179
Surplus notes .................................................... 7.63% -7.88% 7.84% 2015 - 2025 700 700
Other notes ...................................................... 0.22% -8.00% 4.47% 2016 - 2030 133 42
Capital lease obligations ............................................ 33 37
Total long-term debt (2) ............................................. 16,535 20,624
Total short-term debt ............................................... 100 686
Total .......................................................... $16,635 $21,310
(1) Range of interest rates and weighted average interest rates are for the year ended December 31, 2012.
(2) Excludes $2.5 billion and $3.1 billion of long-term debt relating to CSEs at December 31, 2012 and 2011, respectively. See Note 8.
The aggregate maturities of long-term debt at December 31, 2012 for the next five years and thereafter are $753 million in 2013, $1.3 billion in
2014, $1.2 billion in 2015, $1.2 billion in 2016, $504 million in 2017 and $11.5 billion thereafter.
Advances agreements and capital lease obligations are collateralized and rank highest in priority, followed by unsecured senior debt which consists
of senior notes and other notes, followed by subordinated debt which consists of junior subordinated debt securities (see Note 14). Payments of
interest and principal on the Company’s surplus notes, which are subordinate to all other obligations at the operating company level and are senior to
obligations at MetLife, Inc., may be made only with the prior approval of the insurance department of the state of domicile. Collateral financing
arrangements (see Note 13) are supported by either surplus notes of subsidiaries or financing arrangements with MetLife, Inc. 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 such covenants at December 31, 2012.
Senior Notes — Senior Debt Securities Underlying Common Equity Units
In connection with the financing of the ALICO Acquisition, in November 2010, MetLife, Inc. issued to AM Holdings $3.0 billion (estimated fair value of
$3.0 billion) of three series of Debt Securities, which constitute a part of the common equity units more fully described in Note 15.
In October 2012, MetLife, Inc. closed the successful remarketing of the Series C Debt Securities underlying the common equity units. The Series C
Debt Securities were remarketed as 1.756% Series C senior debt securities Tranche 1 and 3.048% Series C senior debt securities Tranche 2, due
December 2017 and December 2022, respectively. MetLife, Inc. did not receive any proceeds from the remarketing.
The Series D Debt Securities and Series E Debt Securities initially bear interest at 1.92% and 2.46%, respectively (an average rate of 2.19%), initially
mature in June 2024 and June 2045, respectively, and are subject to remarketing. 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 E Debt Securities, such Debt Securities will be
divided into two tranches equal in principal amount with maturity dates of June 2018 and June 2045.
Senior Notes — Other Issuances
In August 2012, MetLife, Inc. issued $750 million of senior notes due in August 2042. The senior notes bear interest at a fixed rate of 4.125%,
payable semi-annually. In connection with the issuance, MetLife, Inc. incurred $7 million of related costs which have been capitalized and included in
other assets. These costs are being amortized over the term of the senior notes.
In August 2010, in anticipation of the ALICO Acquisition, MetLife, Inc. issued senior notes as follows:
‰$1.0 billion senior notes due February 6, 2014, which bear interest at a fixed rate of 2.375%, payable semiannually;
‰$1.0 billion 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 senior note issuances, 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.
Advances from the Federal Home Loan Bank of New York
MetLife Bank has been a member of the FHLB of NY and, in connection with such membership, entered into advances agreements with the FHLB
of NY under which MetLife Bank received cash advances, which were reflected in long-term debt or short-term debt according to the tenor of the
advances. In January 2012, MetLife Bank discontinued taking advances from the FHLB of NY. In April 2012, MetLife Bank transferred cash to MLIC
related to $3.8 billion of outstanding advances which had been included in long-term debt, and MLIC assumed the associated obligations under terms
similar to those of the transferred advances by issuing funding agreements for which the liability is included in PABs. During the year ended
December 31, 2012, MetLife Bank did not receive advances. During the years ended December 31, 2011 and 2010, MetLife Bank received advances
totaling $1.3 billion and $2.1 billion, respectively. During the years ended December 31, 2012, 2011 and 2010, MetLife Bank made repayments totaling
$374 million, $750 million, and $349 million, respectively, related to long-term borrowings under the advances agreements. The amount of MetLife
Bank’s liability for advances was $4.8 billion at December 31, 2011, which was included in long-term debt and short-term debt depending upon the
original tenor of the advance. There was no long-term debt or short-term debt liability for advances at December 31, 2012.
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