Long-Term Debt

The carrying value of long-term debt consisted of the following at December 31 (in millions):



	2015		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
6% Subordinated Debentures due November 2055	150		—
	300		150
Subsidiaries:
Notes payable secured by real estate	—		59
National Interstate bank credit facility	12		12
	12		71
	$	1,020	$	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% (8.6110% at December 31, 2015). The fair value of the interest rate swap (an asset of $2 million at December 31, 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.

At December 31, 2015, scheduled principal payments on debt for the subsequent five years and thereafter were as follows: 2016 — none; 2017 — $12 million; 2018 — none; 2019 — $350 million; 2020 — none and thereafter — $658 million.

As shown below at December 31 (in millions), the majority of AFG’s long-term debt is unsecured obligations of the holding company and its subsidiaries.



	2015		2014
Senior unsecured obligations	$	720	$	852
Subordinated unsecured obligations	300		150
Obligations secured by real estate	—		59
	$	1,020	$	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 December 31, 2015 or December 31, 2014.

National Interstate can borrow up to $100 million under its unsecured credit agreement, which expires in November 2017. At December 31, 2015, there was $12 million outstanding under this agreement, bearing interest at 1.399% (six-month LIBOR plus 0.875%).

In September 2015, AFG used cash on hand to redeem the $132 million in outstanding AFG 7% Senior Notes due September 2050 at par value. In November 2015, AFG issued $150 million in 6% Subordinated Debentures due in 2055. The net proceeds of the offering will be used for general corporate purposes, which may include repurchases of AFG’s outstanding Common Stock. During 2015, subsidiaries of AFG repaid all of the outstanding notes secured by real estate.

In September 2014, AFG issued $150 million in 6-1/4% Subordinated Debentures due 2054.

In 2013, AFG subsidiaries redeemed Variable Rate Subordinated Debentures at par value and paid off a secured borrowing balance at maturity.

Cash interest payments on long-term debt were $75 million in 2015, $72 million in 2014 and $71 million in 2013. In 2015, AFG received $2 million in interest under the interest rate swap discussed above.