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Short-Term and Long-Term Debt
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Short-Term and Long-Term Debt Short-Term and Long-Term Debt
The aggregate carrying value of short-term and long-term debt were as follows (in millions):

September 30,December 31,
20212020
Short-Term Debt
Term loan due 20221,601.7 — 
Long-Term Debt
Term loan due 2023$750.8 $— 
Surplus notes249.7 249.7 
FHLBI bank loans68.0 72.3 
Total long-term debt$1,068.5 $322.0 
Scheduled Maturities of Debt
Due in less than 1 year$1,601.7 
Due in more than 1 to 5 years750.8 
Due after 5 years317.7 
Total$2,670.2 
Term Loan

On February 22, 2021, the Company entered into loan facilities including a $1.0 billion revolving credit facility (the “Revolving Facility”), a $1.7 billion senior unsecured delayed draw term loan facility that matures in May 2022 (the “2022 DDTL Facility”) and a $1.0 billion senior unsecured delayed draw term loan facility that matures in February 2023 (the “2023 DDTL Facility”, and together with the Revolving Facility and the 2022 DDTL Facility, the “Credit Facilities”) with a syndicate of banks. The Revolving Facility provides liquidity backstop. On September 10, 2021, the Company borrowed an aggregate principal amount of $2.35 billion under the term loan facilities as follows: $1.6 billion under the 2022 DDTL Facility and $750.0 million under the 2023 DDTL Facility. The proceeds of those borrowings were used for general corporate purposes, including liquidity at the holding company and capitalization of the insurance subsidiaries. Under the terms of the credit agreement for the DDTL Facilities, subject to certain exceptions, 100% of the net cash proceeds from any debt issuance, preferred equity issuance or hybrid instrument issuance by the Company or its subsidiaries is required to be applied (i) first to prepay the then outstanding principal amount and accrued interest thereon, if any, under the 2022 DDTL Facility and (ii) thereafter, to prepay the then outstanding principal amount and accrued interest thereon, if any, under the 2023 DDTL Facility.

Surplus Notes

Under Michigan Insurance Law, for statutory reporting purposes, the surplus notes are not part of the legal liabilities of the Company and are considered surplus funds. Payments of interest or principal may only be made with the prior approval of the commissioner of insurance of the state of Michigan and only out of surplus earnings which the commissioner determines to be available for such payments under Michigan Insurance Law.

On March 15, 1997, the Company, through its subsidiary, Jackson, issued 8.15% surplus notes in the principal amount of $250.0 million due March 15, 2027. These surplus notes were issued pursuant to Rule 144A under the Securities Act of 1933, as amended, and are unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims and may not be redeemed at the option of the Company or any holder prior to maturity. Interest is payable semi-annually on March 15th and September 15th of each year. Interest expense on the notes was $5.1 million and $15.3 million for the three and nine months ended September 30, 2021, respectively. Interest expense on the notes was $5.2 million and $15.4 million for the three and nine months ended September 30, 2020, respectively.

On November 6, 2019, the Company, through its subsidiary, Brooke Life, issued a 4.5% surplus note payable to its ultimate parent, Prudential plc, in the principal amount of $2.0 billion due November 6, 2059. In exchange, the Company remitted a return of capital of $2.0 billion to Prudential, plc. In June 2020, Prudential transferred this note to the Company’s newly
formed subsidiary, Jackson Finance, LLC (“Jackson Finance”). As settlement, the Company issued shares as further described in Note 18. As a result of the transfer, this note is considered intercompany and is eliminated in consolidation. This surplus note was issued pursuant to Rule 144A under the Securities Act of 1933, as amended, and is unsecured and subordinated to all present and future indebtedness, policy claims and other creditor claims. This note may be redeemed subject to prior approval of the Michigan Department of Insurance and Financial Services and at the mutual agreement of the Company and the holder after the thirtieth anniversary of the note’s issuance. Interest is payable semi-annually on March 15th and September 15th of each year. Interest expense on the notes was nil and $41.0 million for the three and nine months ended September 30, 2020.

FHLB Loans

The Company received loans of $50.0 million from the FHLBI under its community investment program in both 2015 and 2014, which amortize on a straight-line basis over the loan term. The weighted average interest rate on these loans was 0.10% and 0.58% for the for the nine months ended September 30, 2021 and 2020.

The outstanding balance on these loans was $68.1 million and $72.3 million at September 30, 2021 and December 31, 2020, respectively. At September 30, 2021, the loans were collateralized by mortgage-related securities and commercial mortgage loans with a carrying value of $92.7 million.

Bank Loan

On November 7, 2019, the Company, issued a $350.0 million short-term note payable to Standard Chartered Bank, which was guaranteed by the Company’s ultimate parent, Prudential plc. In exchange, the Company paid a dividend of $350.0 million to Prudential. This note accrued interest at LIBOR plus 0.20% per annum and was due November 7, 2020. In 2020, the Company transferred this note, plus all outstanding interest due, to Prudential and in turn the Company issued shares as further described in Note 18. Interest expense on the notes was nil and $3.6 million for the three and nine months ended September 30, 2020, respectively.