Long-term and short-term debt outstanding was as follows:
|
| | | | | | | | | | | | | |
| Interest Rates (1) | | Maturity | | December 31, |
| Range | | Weighted
Average | 2013 | | 2012 |
| | | | | | | (In millions) |
Senior notes | 1.52% - 7.72% | | 4.96% | | 2014 - 2045 | | $ | 15,938 |
| | $ | 15,669 |
|
Surplus notes | 7.63% - 7.88% | | 7.84% | | 2015 - 2025 | | 701 |
| | 700 |
|
Other notes | 1.39% - 8.00% | | 4.04% | | 2014 - 2030 | | 531 |
| | 133 |
|
Capital lease obligations | | | | | | | 28 |
| | 33 |
|
Total long-term debt (2) | | | | | | | 17,198 |
| | 16,535 |
|
Total short-term debt | | | | | | | 175 |
| | 100 |
|
Total | | | | | | | $ | 17,373 |
| | $ | 16,635 |
|
______________
| |
(1) | Range of interest rates and weighted average interest rates are for the year ended December 31, 2013. |
| |
(2) | Excludes $1.5 billion and $2.5 billion of long-term debt relating to CSEs — FVO at December 31, 2013 and 2012, respectively. See Note 8. |
The aggregate maturities of long-term debt at December 31, 2013 for the next five years and thereafter are $1.4 billion in 2014, $1.2 billion in 2015, $1.3 billion in 2016, $502 million in 2017, $1.5 billion in 2018 and $11.3 billion thereafter.
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, 2013.
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 (the “Series C Debt Securities,” the “Series D Debt Securities,” and the “Series E Debt Securities,” collectively, the “Debt Securities”), which constitute a part of the common equity units more fully described in Note 15.
In both September 2013 and October 2012, MetLife, Inc. closed the successful remarketing of senior debt securities underlying the common equity units. The Series D Debt Securities were remarketed in September 2013 as 4.368% senior debt securities due September 2023. The Series C Debt Securities were remarketed in October 2012 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 remarketings.
The Series E Debt Securities initially bear interest at 2.46%, initially mature in June 2045, and are subject to remarketing. The interest rates will be reset in connection with the successful remarketing of the Series E 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 November 2013, MetLife, Inc. issued $1.0 billion of senior notes due in November 2043. The senior notes bear interest at a fixed rate of 4.875%, payable semi-annually. In connection with the issuance, MetLife, Inc. incurred $10 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 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.
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 was included in PABs. During the years ended December 31, 2013 and 2012, MetLife Bank did not receive advances. During the year ended December 31, 2011, MetLife Bank received advances totaling $1.3 billion. During the years ended December 31, 2012 and 2011, MetLife Bank made repayments totaling $374 million and $750 million, respectively, related to long-term borrowings under the advances agreements. MetLife Bank did not make repayments in 2013. There was no long-term debt or short-term debt liability for advances at December 31, 2013 and 2012.
Short-term Debt
Short-term debt with maturities of one year or less was as follows:
|
| | | | | | | |
| December 31, |
| 2013 | | 2012 |
| (In millions) |
Commercial paper | $ | 175 |
| | $ | 100 |
|
Average daily balance | $ | 103 |
| | $ | 119 |
|
Average days outstanding | 55 days |
| | 40 days |
|
During the years ended December 31, 2013, 2012 and 2011, the weighted average interest rate on short-term debt was 0.12%, 0.17% and 0.33%, respectively.
Interest Expense
Interest expense related to long-term and short-term debt included in other expenses was $854 million, $871 million and $975 million for the years ended December 31, 2013, 2012 and 2011, respectively. Such amounts do not include interest expense on long-term debt related to CSEs — FVO, collateral financing arrangements, junior subordinated debt securities, or common equity units. See Notes 8, 13, 14 and 15.
Credit and Committed Facilities
The Company maintains unsecured credit facilities and committed facilities, which aggregated $4.0 billion and $12.4 billion, respectively, at December 31, 2013. When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements.
Credit Facilities
The unsecured credit facilities are used for general corporate purposes, to support the borrowers’ commercial paper programs and for the issuance of letters of credit. Total fees expensed associated with these credit facilities were $24 million, $30 million and $35 million for the years ended December 31, 2013, 2012 and 2011, respectively, and are included in other expenses. Information on these credit facilities at December 31, 2013 was as follows:
|
| | | | | | | | | | | | | | | | | | |
Borrower(s) | | Expiration | | Capacity | | Letters of Credit Issued | | Drawdowns | | Unused Commitments |
| | | | (In millions) |
MetLife, Inc. and MetLife Funding, Inc. | | September 2017 (1) | | $ | 1,000 |
| | $ | 59 |
| | $ | — |
| | $ | 941 |
|
MetLife, Inc. and MetLife Funding, Inc. | | August 2016 (2) | | 3,000 |
| | 133 |
| | — |
| | 2,867 |
|
Total | | | | $ | 4,000 |
| | $ | 192 |
| | $ | — |
| | $ | 3,808 |
|
______________
| |
(1) | In September 2012, MetLife, Inc. and MetLife Funding, Inc. entered into a $1.0 billion five-year credit agreement which amended and restated the three-year agreement dated October 2010. All borrowings under the 2012 five-year credit agreement must be repaid by September 2017, except that letters of credit outstanding on that date may remain outstanding until no later than September 2018. MetLife, Inc. incurred costs of $4 million related to the amended and restated credit facility, which were capitalized and included in other assets. These costs are being amortized over the remaining term of the amended and restated credit facility. |
| |
(2) | In connection with the October 2013 re-domestication of Exeter to Delaware in anticipation of the Mergers and the related redistribution of assets held in trust at Exeter, $1.9 billion of outstanding letters of credit were no longer required and therefore canceled by the Company. Accordingly, remaining availability under the unsecured credit facilities increased by $1.9 billion in October 2013. See Note 8 for further information on the Mergers. |
Committed Facilities
The committed facilities are used for collateral for certain of the Company’s affiliated reinsurance liabilities. Total fees expensed associated with these committed facilities were $103 million, $96 million and $93 million for the years ended December 31, 2013, 2012 and 2011, respectively, and are included in other expenses. Information on these committed facilities at December 31, 2013 was as follows:
|
| | | | | | | | | | | | | | | | | | |
Account Party/Borrower(s) | | Expiration | | Capacity | | Letters of Credit Issued | | Drawdowns | | Unused Commitments |
| | | | (In millions) |
MetLife, Inc. | | August 2014 | | $ | 300 |
| | $ | 300 |
| | $ | — |
| | $ | — |
|
Exeter Reassurance Company, Ltd., MetLife, Inc. & Missouri Reinsurance, Inc. | | June 2016 | | 500 |
| | 490 |
| | — |
| | 10 |
|
MetLife Reinsurance Company of Vermont & MetLife, Inc. | | December 2020 (1) | | 350 |
| | 350 |
| | — |
| | — |
|
Exeter Reassurance Company, Ltd. | | December 2027 (1) | | 650 |
| | 600 |
| | — |
| | 50 |
|
MetLife Reinsurance Company of South Carolina & MetLife, Inc. | | June 2037 (2) | | 3,500 |
| | — |
| | 2,797 |
| | 703 |
|
MetLife Reinsurance Company of Vermont & MetLife, Inc. | | December 2037 (1) | | 2,896 |
| | 1,937 |
| | — |
| | 959 |
|
MetLife Reinsurance Company of Vermont & MetLife, Inc. | | September 2038 (1) | | 4,250 |
| | 3,062 |
| | — |
| | 1,188 |
|
Total | | | | $ | 12,446 |
| | $ | 6,739 |
| | $ | 2,797 |
| | $ | 2,910 |
|
______________
| |
(1) | MetLife, Inc. is guarantor under this agreement. |
| |
(2) | The drawdown on this facility is associated with a collateral financing arrangement described more fully in Note 13. |
