Long-Term Debt

The carrying value of long-term debt consisted of the following (in millions):



	September 30, 2015		December 31, 2014
Direct Senior Obligations of AFG:
9-7/8% Senior Notes due June 2019	$	350	$	350
6-3/8% Senior Notes due June 2042	230		230
5-3/4% Senior Notes due August 2042	125		125
7% Senior Notes due September 2050	—		132
Other	3		3
	708		840

Direct Subordinated Obligations of AFG:
6-1/4% Subordinated Debentures due September 2054	150		150

Subsidiaries:
Notes payable secured by real estate due 2015 through 2016	10		59
National Interstate bank credit facility	12		12
	22		71
	$	880	$	1,061

To achieve a desired balance between fixed and variable rate debt, AFG entered into an interest rate swap in June 2015, which effectively converts its 9-7/8% Senior Notes to a floating rate of three-month LIBOR plus 8.099% (8.4362% at September 30, 2015). The fair value of the interest rate swap (an asset of $7 million at September 30, 2015) and the offsetting adjustment to the carrying value of the notes are both included in the carrying value of the 9-7/8% Senior Notes in the table above.

On September 30, 2015, AFG used cash on hand to redeem the $132 million in outstanding AFG 7% Senior Notes due September 2050 at par value. Scheduled principal payments on debt for the balance of 2015, the subsequent five years and thereafter were as follows: 2015 — less than $1 million; 2016 — $10 million; 2017 — $12 million; 2018 — none; 2019 — $350 million; 2020 — none and thereafter — $508 million.

As shown below (in millions), the majority of AFG’s long-term debt is unsecured obligations:



	September 30, 2015		December 31, 2014
Senior unsecured obligations	$	720	$	852
Subordinated unsecured obligations	150		150
Obligations secured by real estate	10		59
	$	880	$	1,061

AFG can borrow up to $500 million under its revolving credit facility which expires in December 2016. Amounts borrowed under this agreement bear interest at rates ranging from 1.00% to 1.875% (currently 1.375%) over LIBOR based on AFG’s credit rating. No amounts were borrowed under this facility at September 30, 2015 or December 31, 2014.

National Interstate can borrow up to $100 million under its unsecured credit agreement, which expires in November 2017. At September 30, 2015, there was $12 million outstanding under this agreement, bearing interest at 1.28% (six-month LIBOR plus 0.875%).