MetLife 2013 Annual Report Download - page 71

Liquidity and Capital Sources
In addition to the general description of liquidity and capital sources in “— Summary of Primary Sources and Uses of Liquidity and Capital,” the
following additional information is provided regarding our primary sources of liquidity and capital:
Global Funding Sources
Liquidity is provided by a variety of funding sources, including funding agreements, credit facilities and commercial paper. Capital is provided by a
variety of funding sources, including short-term and long-term debt, collateral financing arrangements, junior subordinated debt securities, preferred
securities and equity and equity-linked securities. The diversity of our funding sources enhances our funding flexibility, limits dependence on any one
market or source of funds and generally lowers the cost of funds. Our primary global funding sources include:
Common Stock
In September 2013 and October 2012, MetLife, Inc. issued 22,679,955 and 28,231,956 new shares, respectively, of its common stock, each
for $1.0 billion, in connection with the remarketing of senior debt securities and settlement of stock purchase contracts. See “— Remarketing of
Senior Debt Securities and Settlement of Stock Purchase Contracts.”
In March 2011, MetLife, Inc. issued 68,570,000 new shares of its common stock at a price of $43.25 per share for proceeds of $2.9 billion, net
of $16 million of issuance costs. The proceeds were used to repurchase all of MetLife, Inc.’s convertible preferred stock. See “— Liquidity and
Capital Uses — Convertible Preferred Stock Repurchases” and Note 16 of the Notes to the Consolidated Financial Statements.
Commercial Paper, Reported in Short-term Debt
MetLife, Inc. and MetLife Funding, Inc. (“MetLife Funding”) each have commercial paper programs supported by $4.0 billion in general corporate
credit facilities (see “— Credit and Committed Facilities”). MetLife Funding, a subsidiary of Metropolitan Life Insurance Company (“MLIC”), servesas
our centralized finance unit. MetLife Funding raises cash from its commercial paper program and uses the proceeds to extend loans, through
MetLife Credit Corp., another subsidiary of MLIC, to MetLife, Inc., MLIC and other affiliates in order to enhance the financial flexibility and liquidity of
these companies. Outstanding balances for the commercial paper programs fluctuate in line with changes to affiliates’ financing arrangements.
Federal Home Loan Bank Funding Agreements, Reported in PABs
Certain of our domestic insurance subsidiaries are members of a regional FHLB. During the years ended December 31, 2013, 2012 and 2011,
we issued $11.5 billion, $17.4 billion and $8.8 billion, respectively, and repaid $11.8 billion, $14.8 billion and $8.7 billion, respectively, under funding
agreements with certain regional FHLBs. At December 31, 2013 and 2012, total obligations outstanding under these funding agreements were
$15.0 billion and $15.4 billion, respectively. See Note 4 of the Notes to the Consolidated Financial Statements.
Special Purpose Entity Funding Agreements, Reported in PABs
We issue 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, 2013, 2012 and 2011, we issued $37.7 billion, $35.1 billion and $39.9 billion,
respectively, and repaid $36.8 billion, $31.1 billion and $41.6 billion, respectively, under such funding agreements. At December 31, 2013 and
2012, total obligations outstanding under these funding agreements were $31.2 billion and $30.0 billion, respectively. See Note 4 of the Notes to
the Consolidated Financial Statements.
Federal Agricultural Mortgage Corporation Funding Agreements, Reported in PABs
We have issued funding agreements to the Federal Agricultural Mortgage Corporation (“Farmer Mac”), as well as 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 Farmer Mac. The obligations under all such funding agreements are secured by a pledge of
certain eligible agricultural real estate mortgage loans. During the years ended December 31, 2013 and 2012, there were no issuances or
repayments under such funding agreements. During the year ended December 31, 2011, we issued $1.5 billion and repaid $1.5 billion under such
funding agreements. At both December 31, 2013 and 2012, total obligations outstanding under these funding agreements were $2.8 billion. See
Note 4 of the Notes to the Consolidated Financial Statements.
Debt Issuances and Other Borrowings
See Note 12 of the Notes to the Consolidated Financial Statements for further information on the following issuances of debt and other
borrowings:
‰In November 2013, MetLife, Inc. issued $1.0 billion of senior notes for general corporate purposes, which include repayment of certain senior
notes upon their maturity in 2014;
‰In August 2012, MetLife, Inc. issued $750 million of senior notes for general corporate purposes, which include repayment of certain senior
notes upon their maturity in 2013;
‰During the year ended December 31, 2011, MetLife Bank received advances related to long-term borrowings totaling $1.3 billion, and during
the years ended December 31, 2012 and 2011, MetLife Bank received advances related to short-term borrowings totaling $150 million and
$10.1 billion, respectively, from the FHLB of New York (“FHLB of NY”).
Remarketing of Senior Debt Securities and Settlement of Stock Purchase Contracts
In both September 2013 and October 2012, MetLife, Inc. closed the successful remarketings of $1.0 billion of senior debt securities underlying
the common equity units which were issued in November 2010 in connection with the ALICO Acquisition. MetLife, Inc. did not receive any proceeds
from the remarketings. Most holders of common equity units used the remarketing proceeds to settle their payment obligations under the applicable
stock purchase contracts. The subsequent settlement of the stock purchase contracts provided proceeds to MetLife, Inc. of $1.0 billion in each of
September 2013 and October 2012 in exchange for shares of MetLife, Inc.’s common stock. In September 2013 and October 2012, MetLife, Inc.
delivered 22,679,955 and 28,231,956 shares, respectively, of its newly issued common stock to settle the stock purchase contracts.
See Note 15 of the Notes to the Consolidated Financial Statements for additional information regarding the remarketings.
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