Delaware | | | 6311 | | | 95-4715639 |
(State or other jurisdiction of incorporation or organization) | | | (Primary Standard Industrial Classification Code Number) | | | (I.R.S. Employer Identification Number) |
Eric T. Juergens, Esq. Paul M. Rodel, Esq. Debevoise & Plimpton LLP 919 Third Avenue New York, New York 10022 (212) 909-6000 | | | Edward D. Herlihy, Esq. David K. Lam, Esq. Mark A. Stagliano, Esq. Wachtell, Lipton, Rosen & Katz LLP 51 West 52nd Street New York, New York 10019 (212) 403-1000 | | | Craig B. Brod, Esq. Jeffrey D. Karpf, Esq. Cleary Gottlieb Steen & Hamilton LLP One Liberty Plaza New York, New York 10006 (212) 225-2000 |
Large accelerated filer | | | ☐ | | | | | Accelerated filer | | | ☐ | |
Non-accelerated filer | | | ☒ | | | | | Smaller reporting company | | | ☐ | |
| | | | | | Emerging growth company | | | ☐ |
| | Per Share | | | Total | |
Initial public offering price | | | $ | | | $ |
Underwriting discounts and commissions | | | $ | | | $ |
Proceeds to the selling stockholder, before expenses | | | $ | | | $ |
J.P. Morgan | | | Morgan Stanley | | | Piper Sandler |
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• | “1844 Market” means 1844 Market Street, LLC; |
• | “AGAMHC” means AIG Global Asset Management Holding Corporation; |
• | “AGC” means AGC Life Insurance Company, a Missouri insurance company; |
• | “AGL” means American General Life Insurance Company, a Texas insurance company; |
• | “AGREIC” means AIG Global Real Estate Investment Corporation; |
• | “AHAC” means American Home Assurance Company, a consolidated subsidiary of AIG; |
• | “AIG” means American International Group, Inc. and its subsidiaries, other than Corebridge and Corebridge’s subsidiaries; |
• | “AIG 200” means AIG’s multi-year effort to support underwriting excellence, modernize its operating infrastructure, enhance user and customer experiences and become a more unified company. Under this program, Corebridge and its subsidiaries have a targeted savings of $125 million on an annual run rate basis by the end of 2022, of which $25 million has been earned to date (both amounts are on a pre-tax basis); |
• | “AIG Bermuda” means AIG Life of Bermuda, Ltd, a Bermuda insurance company; |
• | “AIG FP” means AIG Financial Products Corporation, a consolidated subsidiary of AIG; |
• | “AIG Group” means American International Group, Inc. and its subsidiaries, including Corebridge and Corebridge’s subsidiaries; |
• | “AIG Inc.” means American International Group, Inc., a Delaware corporation; |
• | “AIGLH” means AIG Life Holdings, Inc., a Texas corporation; |
• | “AIG Life UK” means AIG Life Ltd, a UK insurance company, and its subsidiary; |
• | “AIGM” means AIG Markets, Inc., a consolidated subsidiary of AIG; |
• | “AIGT” means AIG Technologies, Inc., a New Hampshire corporation; |
• | “AIRCO” means American International Reinsurance Company, Ltd., a consolidated subsidiary of AIG; |
• | “AMG” means AIG Asset Management (U.S.), LLC; |
• | “Argon” means Argon Holdco LLC, a wholly owned subsidiary of Blackstone Inc.; |
• | “Blackstone” means Blackstone Inc. and its subsidiaries; |
• | “Blackstone IM” means Blackstone ISG-1 Advisors L.L.C.; |
• | “BlackRock” means BlackRock Financial Management, Inc.; |
• | “Cap Corp” means AIG Capital Corporation, a Delaware corporation; |
• | “Corebridge” means Corebridge Financial, Inc. (formerly known as SAFG Retirement Services, Inc.), a Delaware corporation; |
• | “Eastgreen” means Eastgreen Inc.; |
• | “Fortitude Re” means Fortitude Reinsurance Company Ltd., a Bermuda insurance company. AIG formed Fortitude Re in 2018 and sold substantially all of its ownership interest in Fortitude Re’s parent company in two transactions in 2018 and 2020 so that we currently own a less than 3% indirect interest in Fortitude Re. In February 2018, AGL, VALIC and USL entered into modco reinsurance agreements with Fortitude Re and AIG Bermuda novated its assumption of certain long duration contracts from an affiliated entity to Fortitude Re. In the modco agreements, the investments supporting the reinsurance agreements, which reflect the majority of the consideration that would be paid to the |
• | “Fortitude Re Bermuda” means FGH Parent, L.P., a Bermuda exempted limited partnership; |
• | “Laya” means Laya Healthcare Limited, an Irish insurance intermediary, and its subsidiary; |
• | “Lexington” means Lexington Insurance Company, an AIG subsidiary; |
• | “Life Fleet” means AGL, USL and VALIC; |
• | “Life Fleet RBC” means the RBC ratio for the Life Fleet, comprising AGL, USL and VALIC, our primary risk-bearing entities. AGL, USL and VALIC are domestic insurance entities with a statutory surplus greater than $500 million on an individual basis. The Life Fleet does not include AGC as it has no operations outside of internal reinsurance. Specifically, AGC serves as an affiliate reinsurance company for the Life Fleet covering (i) AGL’s life insurance policies issued between January 1, 2017 and December 31, 2019 subject to Regulation XXX and AXXX and (ii) life insurance policies issued between January 1, 2020 and December 31, 2021 subject to principle-based reserving requirements; |
• | “LIMRA” means the Life Insurance Marketing and Research Association International, Inc.; |
• | “Majority Interest Fortitude Sale” means the sale by AIG of substantially all of its interests in Fortitude Re's parent company to Carlyle FRL, L.P., an investment fund advised by an affiliate of The Carlyle Group Inc., and T&D United Capital Co., Ltd., a subsidiary of T&D Holdings, Inc., under the terms of a membership interest purchase agreement entered into on November 25, 2019 by and among AIG, Fortitude Group Holdings, LLC, Carlyle FRL, L.P., The Carlyle Group Inc., T&D United Capital Co., Ltd. and T&D Holdings, Inc. We currently own less than a 3% indirect interest in Fortitude Re; |
• | “NUFIC” means National Union Fire Insurance Company of Pittsburgh, PA, a consolidated subsidiary of AIG; |
• | “NYSE” means the New York Stock Exchange; |
• | “Reorganization” means the transactions described under the heading “The Reorganization Transactions;” |
• | “USL” means The United States Life Insurance Company in the City of New York, a New York insurance company; |
• | “VALIC” means The Variable Annuity Life Insurance Company, a Texas insurance company; |
• | “VALIC Financial Advisors” means VALIC Financial Advisors, Inc., a Texas corporation; and |
• | “we,” “us,” “our” or the “Company” means Corebridge and its subsidiaries after giving effect to the transactions described under “The Reorganization Transactions.” |
• | our scaled platform and position as a leading life and annuity company across a broad range of products, managing or administering $410.9 billion in client assets as of December 31, 2021; |
• | our four businesses, which provide a diversified and attractive mix of fee income, spread income and underwriting margin; |
• | our broad distribution platform, which gives us access to end customers, employers, retirement plan sponsors, banks, broker-dealers, general agencies, independent marketing organizations and independent insurance agents; |
• | our proven expertise in product design, which positions us to optimize risk-adjusted returns as we grow our business; |
• | our strategic partnership with Blackstone, which we believe will allow us to further grow both our retail and institutional product lines, and enhance risk-adjusted returns; |
• | our high-quality liability profile, supported by our strong balance sheet and disciplined approach to risk management, which has limited our exposure to product features and portfolios with less attractive risk-adjusted returns; |
• | our ability to deliver consistent cash flows and an attractive return for our stockholders; and |
• | our strong and experienced senior management team. |
• | Individual Retirement — We are a leading provider in the $255 billion individual annuity market across a range of product types, including fixed, fixed index and variable annuities, with $13.7 billion in premiums and deposits in 2021. We offer a variety of optional benefits within these products, including lifetime income guarantees and death benefits. Our broad and scaled product offerings and operating platform have allowed our company to rank in the top two in total individual annuity sales in each of the last nine years, and we are the only top 10 annuity provider with a balanced mix of products across all major annuity categories according to LIMRA. Our strong distribution relationships and broad multi-product offerings allow us to quickly adapt to respond to shifting customer needs and economic and competitive dynamics, targeting areas where we see the greatest opportunity for risk-adjusted returns. We are well-positioned for growth due to demographic trends in the U.S. retirement market, supported by our strong platform. Our Individual Retirement business is the largest contributor to our earnings, historically generating consistent spread and fee income. |
• | Group Retirement — We are a leading provider of retirement plans and services to employees of tax-exempt and public sector organizations within the K-12, higher education, healthcare, government and other tax-exempt markets, having ranked third in K-12 schools, fourth in higher education institutions and fifth in healthcare institutions by total assets as of June 30, 2021. According to Cerulli Associates Inc. (“Cerulli Associates”), the size of the not-for-profit defined contribution retirement plan market, excluding the Federal Thrift Savings Plan, was $1.9 trillion in 2020. We work with approximately 1.7 million individuals as of December 31, 2021 through our in-plan products and services and over 300,000 individuals through our out-of-plan products and services. Our out-of-plan capabilities include proprietary and non-proprietary annuities, financial planning, brokerage and advisory services. We offer financial planning advice to employees participating in retirement plans through our career financial advisors. These advisors allow us to develop long-term relationships with our customers by engaging with them early in their careers and providing customized solutions and support. Approximately 26% of our individual customers have been customers of our Group Retirement business for more than 20 years and the average length of our relationships with plan sponsors exceeds 28 years. Our strong customer relationships have led to growth in our AUMA, evidenced by stable in-plan spread-based assets, growing in-plan fee-based assets and growing out-of-plan assets. Our Group Retirement business generates a combination of spread and fee income. While the revenue mix remains balanced, we have grown our advisory and brokerage fee revenue over the last several years, which provides a less capital intensive stream of cash flows. |
• | Life Insurance — We offer a range of life insurance and protection solutions in the approximately $159 billion U.S. life insurance market (based on premium) as of December 31, 2021, according to the Insurance Information Institute, with a growing international presence in the UK and Ireland. We are a key player in the term, indexed universal life and smaller face whole life markets; ranking as a top 15 seller of term, universal and whole life products as of December 31, 2021. Our competitive and flexible product suite is designed to meet the needs of our customers, and we actively participate in product lines that we believe have attractive growth and margin prospects. Further, we have strong third-party distribution relationships and a long history in the direct-to-consumer market, providing us with access to a broad range of customers from the middle market to high net worth. We have also been working to automate certain underwriting reviews so as to make decisions on applications without human intervention, and we reached a decision on approximately 45% of all underwriting applications in 2021 on an automated basis. As of December 31, 2021, we had approximately 4.5 million in-force life insurance policies in the United States, net of those ceded to Fortitude Re. Our Life Insurance product portfolio generates returns through underwriting margin. |
• | Institutional Markets — We serve the institutional life and retirement insurance market with an array of products that include PRT, institutional life insurance sold through the bank-owned life insurance and corporate-owned life insurance markets, stable value wraps and structured settlements. We are also active in the capital markets through our funding agreement-backed note (“FABN”) program. We provide sophisticated, bespoke risk management solutions to both financial and non-financial institutions. Historically, a small number of incremental transactions have enabled us to generate significant new business volumes, providing a meaningful contribution to earnings, while maintaining a small and efficient operational footprint. We believe that market trends will contribute to growth in our stable value wrap product. Our Institutional Markets products generate earnings primarily through net investment spread, with a smaller portion of fee-based income and underwriting margin. |
• | AIG FD — We have a specialized team of approximately 500 sales professionals who partner with and grow our non-affiliated distribution on our broad platform, which includes banks, broker-dealers, general agencies, independent marketing organizations and independent insurance agents. Our direct-to-consumer platform, AIG Direct, primarily markets to middle market consumers through a variety of direct channels, including several types of digital channels such as search advertising, display advertising and email as well as direct mail. |
• | Group Retirement — We have a broad team of relationship managers, consultant relationship professionals, business acquisition professionals and distribution leaders that focus on acquiring, serving and retaining retirement plans. Our affiliated platform, VALIC Financial Advisors, which includes approximately 1,300 career financial advisors as of December 31, 2021, focuses on our Group Retirement business, guiding individuals in both in-plan and out-of-plan investing. |
• | Institutional Relationships — We have strong relationships with insurance brokers, bankers, asset managers, pension consultants and specialized agents who serve as intermediaries in our institutional business. |
(1) | Life Insurance sales, excluding contributions from AIG Direct and AIG Financial Network on a periodic basis, totaled $281 million through the Independent Agents channel for the year ended December 31, 2021. |
• | AIG FD has approximately 500 specialized sales professionals that leverage our strategic account relationships and other partnerships to address multiple client needs. This platform is primarily focused on our non-affiliated distribution through banks, broker-dealers and independent marketing organizations, and specializes in aligning our robust product offering of over 160 life and annuity products with individual partner preferences, reaching independent advisors, agencies and other firms. AIG FD primarily facilitates distribution for our Individual Retirement and Life Insurance businesses, including providing certain partners a unified coverage model that allows for distribution of both our life insurance and annuity products. |
• | Individual Retirement maintains a growing multi-channel distribution footprint built on long-term relationships. As of December 31, 2021, our footprint included over 25,000 advisors and agents actively selling our annuities in the prior twelve months, accessed through long-term relationships with approximately 700 firms distributing our annuity products. These advisors and agents included over 8,500 new producers who sold our annuity products for the first time in twelve months. |
• | Life Insurance has a well-balanced distribution footprint that reaches over 35,000 independent agents as of December 31, 2021, who actively sell our life insurance solutions, through diverse independent channels as well as a direct-to-consumer model. We had access to over 1,000 managing general agents (“MGAs”) and brokerage general agents (“BGAs”) in 2021. In addition to our non-affiliated distribution, our life insurance policies are sold through AIG Direct, our direct-to-consumer brand with more than 140 active agents as of December 31, 2021, which represented 12% of our life insurance sales in 2021. |
• | Group Retirement is supported by a broad team of relationship managers, consultant relationship professionals and business acquisition professionals that focus on acquiring, serving and retaining retirement plans with more than 22,000 plan sponsor relationships as of December 31, 2021. Also, VALIC Financial Advisors helps build relationships with employees through our holistic and vertically-integrated offering. Our field force of approximately 1,300 career financial advisors, as of December 31, 2021, comprises experienced field and phone-based financial advisors, retirement plan consultants and experienced financial planners with an average of nearly 10 years of tenure with VALIC Financial Advisors. These professionals provide education, financial planning and retirement advice to individuals participating in their employer sponsored plan. Due to the relationships built with individuals and employers, our financial professionals can, as permitted by employer guidelines, build broad relationships to provide financial planning, advisory and retirement solutions to approximately 1.7 million individuals through our in-plan products and services and over 300,000 individuals through our out-of-plan products and services, as of December 31, 2021. |
• | Institutional Markets largely writes bespoke transactions and works with a broad range of consultants and brokers, maintaining relationships with insurance brokers, bankers, asset managers and specialized agents who serve as intermediaries. |
• | We believe we can leverage our broad platform to benefit from changing Individual Retirement market dynamics. We intend to maintain and expand our products to provide income and accumulation benefits to our customers. For example, we recently broadened our product portfolio to include a fee-based fixed index annuity to meet the needs of our investment advisor distribution partners. Through our customized wholesaling model, we plan to capitalize on this opportunity by leveraging both external and proprietary data to identify the highest value opportunities at both the distribution partner and financial professional level. |
• | We believe our high-touch model is well-tailored for many employers in the not-for-profit retirement plan market and enables us to help middle market and mass affluent individuals achieve retirement security. Specifically, our career financial advisors provide education and advice to plan participants while accumulating assets in-plan and can seek to serve more of the participant’s financial needs during their lifetime beyond the in-plan relationship, as permitted by employer guidelines. As of December 31, 2021, we have a large extended customer base of approximately 1.7 million plan participants to whom we have access through our in-plan Group Retirement offerings and 300,000 individuals we serve through our out-of-plan Group Retirement offerings. With in-plan income solutions beginning to emerge, we are well-positioned to benefit from market needs. Moreover, by continuing to offer investment advisory services and third-party annuity products, we expect to capture additional fee-based revenue while providing our clients attractive financial solutions outside of the scope of our own product suite. |
• | Our Life Insurance business has an opportunity to help close the current protection gap in the United States and offer value to our customers internationally. For example, we have begun to offer simplified and less expensive insurance options to middle market pre-retirees looking for final expense protection through the launch of our new Simplified Issue Whole Life (“SIWL”) product in the fourth quarter of 2021. Additionally, we expect our strong performance in the term life insurance market to accelerate through enhanced consumer awareness of life insurance coupled with an improved new business process. Our long history in the direct-to-consumer market through a variety of direct-to-consumer channels provides valuable insights and experience for these opportunities. |
• | Our Institutional Markets business has developed relationships with brokers, consultants and other distribution partners to drive increased earnings for its products. We expect to continue to achieve attractive risk-adjusted returns through PRT deals by focusing on the larger end of the full plan termination market where we can leverage our differentiated capabilities around managing market risks, asset-in-kind portfolios and deferred participant longevity. Additionally, we plan to grow our guaranteed investment contract (“GIC”) portfolio by expanding our FABN program. We believe that our Blackstone partnership will differentiate our competitive position by providing assets with a duration, liquidity and return profile that are well-suited to our Institutional Markets offerings, allowing us to grow our transaction volume. |
• | simplify our customer service model and modernize our technology infrastructure with more efficient, up-to-date alternatives, including cloud migration and cloud-based solutions; |
• | further optimize our functional operating model; |
• | build on existing partnership arrangements to further improve scale and drive spend efficiency through technology deployment and process optimization; |
• | rationalize our real estate footprint to align with our business strategy, future operating model and organizational structure; and; |
• | optimize our vendor relationships to drive additional savings. |
• | Life Fleet RBC of at least 400%; |
• | Return of capital to stockholders equal to 60 to 65% of adjusted after-tax operating income attributable to our common stockholders (“AATOI”) consisting of common stockholder dividends of $600 million each year and share repurchases, subject to approval by our board of directors (the “Board”) (see “Dividend Policy”); and |
• | Adjusted ROAE in the range of 12% to 14% based on current accounting rules in effect on the date hereof and without giving effect to any changes resulting from the adoption of the new accounting standard for long duration contracts. |
• | sustained low, declining or negative interest rates, rapidly increasing interest rates or changes to credit spreads; |
• | the deterioration of economic conditions, changes in market conditions, weakening in capital markets, the rise of inflation or geopolitical tensions, including the armed conflict between Ukraine and Russia; |
• | the impact of COVID-19, which will depend on future developments, including with respect to new variants, that are uncertain and cannot be predicted; |
• | unavailable, uneconomical or inadequate reinsurance; |
• | a failure by Fortitude Re to perform its obligations under its reinsurance agreements; |
• | the inaccuracy of the methodologies, estimations and assumptions underlying our valuation of investments and derivatives; |
• | our potential inability to refinance all or a portion of our indebtedness to obtain additional financing; |
• | our limited ability to access funds from our subsidiaries; |
• | a downgrade in the Insurer Financial Strength (“IFS”) ratings of our insurance companies and a downgrade in our credit ratings; |
• | our exposure to liquidity and other risks due to participation in a securities lending program and a repurchase program; |
• | exposure to credit risk due to nonperformance or defaults by our counterparties; |
• | the inadequate and unanticipated performance of third parties that we rely upon to provide certain business and administrative services on our behalf; |
• | our inability to maintain the availability of our critical technology systems and data and safeguard the confidentiality and integrity of our data; |
• | the ineffectiveness of our risk management policies and procedures; |
• | significant legal, governmental or regulatory proceedings; |
• | the ineffectiveness of new elements of our business strategy in accomplishing our objectives; |
• | the intense competition we face in each of our business lines and the technological changes that may present new and intensified challenges to our business; |
• | catastrophes, including those associated with climate change and pandemics; |
• | material changes to, or termination of, our significant investment advisory contracts with other parties, including Fortitude Re; |
• | business or asset acquisitions and dispositions that may expose us to certain risks; |
• | changes in laws and regulations that may affect our operations, increase our insurance subsidiary capital requirements or reduce our profitability; |
• | new laws and regulations, both domestically and internationally; |
• | differences between actual experience and the estimates used in the preparation of financial statements and modeled results used in various areas of our business; |
• | differences in actual experience and the assumptions and estimates used in preparing projections for our financial goals, reserves and cash flows; |
• | the ineffectiveness of our productivity improvement initiatives in yielding our expected expense reductions and improvements in operational and organizational efficiency; |
• | recognition of an impairment of our goodwill or the establishment of an additional valuation allowance against our deferred income tax assets as a result of our business lines underperforming or their estimated fair values declining; |
• | our inability to attract and retain the key employees and highly skilled people we need to support our business, including in light of current competition for talent; |
• | the termination by Blackstone IM of the separately managed account agreements (“SMAs”), or our commitment letter with it to manage portions of our investment portfolio, or risks related to limitations on our ability to terminate the Blackstone IM arrangements; |
• | our limited ability to pursue certain investment opportunities and retain well-performing investment managers due to our exclusive investment management arrangements with Blackstone IM in relation to certain asset classes; |
• | the historical performance of AMG, Blackstone IM and BlackRock not being indicative of the future results of our investment portfolio, our future results or any returns expected on our common shares; |
• | ineffective management of our investment portfolio or harm to our business reputation due to increased regulation or scrutiny of alternative investment advisers and investment activities; |
• | our failure to replicate or replace functions, systems and infrastructure provided by AIG or certain of its affiliates (including through shared service contracts) or our loss of benefits from AIG’s global contracts, and AIG’s failure to perform the services provided for in the Transition Services Agreement, as well as incremental costs we expect to incur as a stand-alone public company; |
• | costs associated with rebranding; |
• | additional expenses requiring us to implement future operational and organizational efficiencies due to our restructuring initiatives in connection with our separation from AIG; |
• | the significant influence that AIG has over us; |
• | actual or potential conflicts of interest with certain of our directors because of their AIG equity ownership or their current or former AIG positions; |
• | the interpretation of insurance holding company laws which may deem that investors in AIG “control” us following their investment in our common stock; |
• | potentially higher U.S. federal income taxes due to our inability to file a single U.S. consolidated federal income tax return following our separation from AIG; |
• | our potential liability for U.S. income taxes of the entire AIG Consolidated Tax Group for all taxable years or portions thereof in which we (or our subsidiaries) were members of such group; and |
• | other potential adverse tax consequences to us from our separation from AIG. |
• | gives effect to a -for- stock split on our common stock effected on , 2022; |
• | assumes no exercise by the underwriters of their option to purchase additional shares of common stock from the selling stockholder; |
• | assumes that the initial public offering price of our common stock will be $ per share (which is the midpoint of the price range set forth on the cover page of this prospectus); and |
• | gives effect to amendments to our amended and restated certificate of incorporation and amended and restated by-laws to be adopted prior to the settlement of this offering. |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | (in millions) | |||||||
Statement of Income (Loss) | | | | | | | |||
Revenues: | | | | | | | |||
Premiums | | | $5,637 | | | $4,341 | | | $3,501 |
Policy fees | | | 3,051 | | | 2,874 | | | 2,930 |
Net investment income: | | | | | | | |||
Net investment income – excluding Fortitude Re funds withheld assets | | | 9,897 | | | 9,089 | | | 9,176 |
Net investment income – Fortitude Re funds withheld assets | | | 1,775 | | | 1,427 | | | 1,598 |
Total net investment income | | | 11,672 | | | 10,516 | | | 10,774 |
Net realized gains (losses): | | | | | | | |||
Net realized gains (losses) – excluding Fortitude Re funds withheld assets and embedded derivative | | | 1,618 | | | (765) | | | (159) |
Net realized gains (losses) on Fortitude Re funds withheld assets | | | 924 | | | 1,002 | | | 262 |
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative | | | (687) | | | (3,978) | | | (5,167) |
Total net realized losses | | | 1,855 | | | (3,741) | | | (5,064) |
Advisory fee income | | | 597 | | | 553 | | | 572 |
Other income | | | 578 | | | 519 | | | 497 |
Total revenue | | | 23,390 | | | 15,062 | | | 13,210 |
Benefits and Expenses: | | | | | | | |||
Policyholder benefits | | | 8,050 | | | 6,602 | | | 5,335 |
Interest credited to policyholder account balances | | | 3,549 | | | 3,528 | | | 3,614 |
Amortization of deferred policy acquisition costs and value of business acquired | | | 1,057 | | | 543 | | | 674 |
Non-deferrable insurance commissions | | | 680 | | | 604 | | | 564 |
Advisory fee expenses | | | 322 | | | 316 | | | 322 |
General operating expenses | | | 2,104 | | | 2,027 | | | 1,975 |
Interest expense | | | 389 | | | 490 | | | 555 |
Loss on extinguishment of debt | | | 219 | | | 10 | | | 32 |
Net (gain) loss on divestitures | | | (3,081) | | | — | | | — |
Net (gain) loss on Fortitude Re transactions | | | (26) | | | 91 | | | — |
Total benefits and expenses | | | 13,263 | | | 14,211 | | | 13,071 |
Income (loss) before income tax (benefit) | | | 10,127 | | | 851 | | | 139 |
Income tax (benefit) | | | 1,843 | | | (15) | | | (168) |
Net income (loss) | | | 8,284 | | | 866 | | | 307 |
Net income attributable to non-controlling interests | | | 929 | | | 224 | | | 257 |
Net income (loss) attributable to Corebridge | | | 7,355 | | | 642 | | | 50 |
Earnings Per Share | | | | | | | |||
Non-GAAP Financial Measures:(1) | | | | | | | |||
Adjusted revenues | | | 20,490 | | | 17,406 | | | 16,798 |
Adjusted pre-tax operating income (loss) | | | 3,685 | | | 3,194 | | | 3,584 |
Adjusted after-tax operating income (loss) | | | 2,929 | | | 2,556 | | | 2,892 |
(1) | See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Use of Non-GAAP Financial Measures and Key Operating Metrics—Non-GAAP Financial Measures” for a discussion of these measures and a reconciliation of each to the most directly comparable GAAP measure. |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | (in millions) | |||||||
Adjusted Pre-Tax Operating Income by Segment: | | | | | | | |||
Individual Retirement | | | 1,895 | | | 1,942 | | | 2,010 |
Group Retirement | | | 1,273 | | | 975 | | | 958 |
Life Insurance | | | 96 | | | 146 | | | 522 |
Institutional Markets | | | 584 | | | 367 | | | 322 |
| | As of December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | (in millions) | |||||||
Balance Sheet | | | | | | | |||
Assets: | | | | | | | |||
Total investments | | | $256,318 | | | $260,274 | | | $238,888 |
Reinsurance assets — Fortitude Re, net of allowance for credit losses and disputes | | | 28,472 | | | 29,158 | | | 29,497 |
Separate account assets, at fair value | | | 109,111 | | | 100,290 | | | 93,272 |
Total assets | | | 416,212 | | | 410,155 | | | 382,476 |
Liabilities: | | | | | | | |||
Future policy benefits for life and accident and health insurance contracts | | | 57,751 | | | 54,660 | | | 50,490 |
Policyholder contract deposits | | | 156,846 | | | 154,892 | | | 147,731 |
Fortitude Re funds withheld payable | | | 35,144 | | | 36,789 | | | 34,433 |
Long-term debt | | | 427 | | | 905 | | | 912 |
Debt of consolidated investment entities | | | 6,936 | | | 10,341 | | | 10,166 |
Separate account liabilities | | | 109,111 | | | 100,290 | | | 93,272 |
Total liabilities | | | 387,284 | | | 370,323 | | | 348,797 |
Equity: | | | | | | | |||
Corebridge Shareholders’ equity: | | | | | | | |||
Common stock class A, $1.00 par value; shares authorized; shares issued | | | – | | | – | | | – |
Common stock class B, $1.00 par value; shares authorized; shares issued | | | – | | | – | | | – |
Additional paid-in capital | | | 8,060 | | | – | | | – |
Retained earnings | | | 8,859 | | | – | | | – |
Shareholder’s net investment | | | – | | | 22,579 | | | 22,476 |
Accumulated other comprehensive income | | | 10,167 | | | 14,653 | | | 9,329 |
Total Corebridge Shareholders’ equity | | | 27,086 | | | 37,232 | | | 31,805 |
Non-redeemable noncontrolling interests | | | 1,759 | | | 2,549 | | | 1,874 |
Total equity | | | 28,845 | | | 39,781 | | | 33,679 |
| | Years Ended December 31, | |||||||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 |
Subsidiary dividends paid | | | $1,564 | | | $540 | | | $1,535 | | | $2,488 | | | $2,409 |
Less: Non-recurring dividends | | | (295) | | | 600 | | | (400) | | | (1,113) | | | (890) |
Tax sharing payments related to utilization of tax attributes | | | $902 | | | $1,026 | | | $954 | | | $370 | | | $782 |
Normalized distributions(1) | | | 2,171 | | | 2,166 | | | 2,089 | | | 1,745 | | | 2,301 |
(1) | See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Use of Non-GAAP Financial Measures and Key Operating Metrics—Non-GAAP Measures” for a discussion of this measure and a reconciliation to the most directly comparable GAAP measure. |
(in millions, except for share data) | | | |
Assets: | | | |
Investments: | | | |
Fixed maturity securities: | | | |
Bonds available for sale | | | $198,568 |
Other bond securities | | | 2,082 |
Equity securities | | | 242 |
Mortgage and other loans receivable | | | 39,388 |
Other invested assets | | | 10,567 |
Short-term investments | | | 5,471 |
Total Investments | | | 256,318 |
Cash | | | 1,220 |
Accrued investment income | | | 1,760 |
Premiums and other receivables | | | 884 |
Reinsurance assets - Fortitude Re | | | 28,472 |
Reinsurance assets - other | | | 2,932 |
Deferred income taxes | | | 4,728 |
Deferred policy acquisition costs and value of business acquired | | | 8,058 |
Other assets | | | 3,588 |
Separate account assets | | | 109,111 |
Total assets | | | $417,071 |
| |
(in millions, except for share data) | | | |
Liabilities: | | | |
Future policy benefits for life and accident and health insurance contracts | | | $57,751 |
Policyholder contract deposits | | | 156,846 |
Other policyholder funds | | | 2,849 |
Fortitude Re funds withheld payable | | | 35,144 |
Other liabilities | | | 9,903 |
Short-term debt | | | — |
Long-term debt | | | 9,427 |
Debt of consolidated investment entities | | | 6,936 |
Separate account liabilities | | | 109,111 |
Total liabilities | | | $387,967 |
Redeemable noncontrolling interest | | | $83 |
Corebridge Shareholders' equity | | | |
Class A Common stock, $1.00 par value, 180,000 shares authorized; 90,100 shares issued | | | — |
Class B Common stock, $1.00 par value, 20,000 shares authorized; 9,900 shares issued | | | — |
Additional paid-in capital | | | 8,060 |
Retained earnings | | | 8,750 |
Accumulated other comprehensive income (loss) | | | 10,452 |
Total Corebridge Shareholders' equity | | | 27,262 |
Non-redeemable noncontolling interests | | | 1,759 |
Total Equity | | | $29,021 |
Total Liabilities, redeemable noncontrolling interest and equity | | | $417,071 |
(dollars in millions, except per common share data) | | | |
Revenues: | | | |
Premiums | | | 5,637 |
Policy fees | | | 3,051 |
Net investment income: | | | |
Net investment income: excluding Fortitude Re funds withheld assets | | | 9,441 |
Net investment income: Fortitude Re funds withheld assets | | | 1,775 |
Total net investment income | | | $11,216 |
Net Realized gains (losses): | | | |
Net realized gains (losses) excluding Fortitude Re funds withheld assets and embedded derivative | | | 1,618 |
Net realized gains (losses) on Fortitude Re funds withheld assets | | | 924 |
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative | | | (687) |
Total Net realized gains (losses) | | | 1,855 |
Advisory fee income | | | 597 |
Other income | | | 578 |
Total Revenues | | | $22,934 |
(dollars in millions, except per common share data) | | | |
Benefits and expenses: | | | |
Policyholder benefits | | | 8,050 |
Interest credited to policyholder account balances | | | 3,549 |
Amortization of deferred policy acquisition costs and value of business acquired | | | 1,057 |
Non-deferrable insurance commissions | | | 681 |
Advisory fees | | | 322 |
General operating and other expenses | | | 2,190 |
Interest expense | | | 655 |
Loss on extinguishment of debt | | | 219 |
Net (gain) loss on divestitures | | | (3,081) |
Loss on Fortitude Re Reinsurance Contract | | | (26) |
Total benefits and expenses | | | $13,616 |
Income (loss) before income tax expense | | | 9,318 |
Income tax expense (benefit): | | | |
Current | | | 1,913 |
Deferred | | | (103) |
Income tax expense (benefit): | | | $1,810 |
Net income (loss) | | | $7,508 |
Less: | | | |
Net income (loss) attributable to noncontrolling interests | | | $861 |
Net income (loss) attributable to Corebridge | | | $6,647 |
| | ||
Income (loss) per common share attributable to Corebridge common shareholders: | | | |
Class A - Basic and diluted | | | $ |
Class B - Basic and diluted | | | $ |
| | ||
Weighted average shares outstanding: | | | |
Class A - Basic and diluted | | | |
Class B - Basic and diluted | | | |
| | ||
Other Pro forma Data(1) | | | |
Pro forma APTOI | | | $2,876 |
Pro forma AATOI | | | $2,291 |
Adjusted ROAE | | | 12.3% |
(1) | APTOI, AATOI and Adjusted ROAE are non-GAAP financial measures. For our definition of APTOI, AATOI and Adjusted ROAE and the uses of such non-GAAP measures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Use of Non-GAAP Financial Measures and Key Operating Metrics—Non-GAAP Financial Measures.” |
| | Pre-tax | | | Total Tax (Benefit) Charge | | | Non-Controlling Interests | | | After Tax | |
Pro forma Pre-tax income (loss)/net income (loss) including NCI | | | 9,318 | | | 1,810 | | | — | | | 7,508 |
Noncontrolling interests | | | — | | | — | | | (861) | | | (861) |
Pro forma Pre-tax income (loss)/ net income attributable to Corebridge | | | 9,318 | | | 1,810 | | | (861) | | | 6,647 |
Fortitude Re Related Items | | | (2,038) | | | (428) | | | — | | | (1,610) |
Other non- Fortitude Re reconciling items(1) | | | (4,404) | | | (797) | | | 861 | | | (2,746) |
Total adjustments | | | (6,442) | | | (1,225) | | | 861 | | | (4,356) |
APTOI / AATOI | | | 2,876 | | | 585 | | | — | | | 2,291 |
(1) | Includes $3.1 billion of pre-tax net gain on divestitures, including disposition of the affordable housing portfolio. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Factors Impacting Our Results—Affordable Housing Sale” and Note 1 to our audited consolidated financial statements. |
(in millions) | | | December 31, 2021 |
Pro forma Net income (loss) attributable to Corebridge (a) | | | $6,647 |
Pro forma AATOI (b) | | | $2,291 |
Pro forma average Total Corebridge Shareholders' equity (c)(1) | | | $31,948 |
Pro forma average Adjusted Book Value (d)(2) | | | $18,672 |
Pro forma ROAE (a /c) | | | 20.8% |
Pro forma Adjusted ROAE (b /d)(3) | | | 12.3% |
(1) | Represents the average of historical Total Corebridge Shareholders’ equity as of December 31, 2020 and 2021 less one half of the aggregate net income impact of the adjustments described in notes (a), (b), (c), (d) and (e) under “Unaudited Pro Forma Condensed Consolidated Financial Information.” |
(2) | Represents the average of historical Adjusted Book Value as of December 31, 2021 and 2020, in each case adjusted to reflect the full-year impact of the $8.3 billion dividend paid to AIG which we believe more meaningfully presents our future capital structure, less one-half of the aggregate net income impact of the adjustments described in notes (a), (b), (c), (d) and (e) under “Unaudited Pro Forma Condensed Consolidated Financial Information.” |
(3) | Reflects an approximate 2 percentage point benefit in 2021 due to alternative investments performing better than our long- term expectation, net of elevated mortality due to COVID-19. |
• | mismatch between the expected duration of our liabilities and our assets; |
• | impairment to our ability to earn the returns or spreads assumed in the pricing and the reserving for our products; |
• | increases in certain statutory reserve requirements that are based on formulas or models that consider interest rates, which would reduce statutory capital; |
• | increases in capital requirements and the amount of assets we must maintain to support statutory reserves, which would reduce surplus, due to decreases in interest rates or changes in prescribed interest rates; |
• | increases in the costs of derivatives we use for hedging or increases in the volume of hedging we do as interest rates change; |
• | loss related to customer withdrawals following a sharp and sustained increase in interest rates; |
• | loss from reduced fee income, increased guaranteed benefit costs and accelerated deferred policy acquisition costs (“DAC”) amortization arising from fluctuations in the variable product separate account values associated with fixed income investment options due to increased interest rates or credit spread widening; |
• | the reinvestment risk associated with more prepayments on mortgage-backed securities and other fixed income securities in decreasing interest rate environments and fewer prepayments in increasing interest rate environments; |
• | an increase in policy loans, surrenders and withdrawals as interest rates rise; and |
• | volatility in our GAAP results of operations driven by interest rate related components of liabilities and equity related to optional guarantee benefits and the cost of associated hedges in low interest rate environments. |
• | increases in policy withdrawals, surrenders and cancellations and other impacts from changes in policyholder behavior as compared to that assumed in pricing; |
• | write-offs of DAC; |
• | increases in liability for future policy benefits due to loss recognition on certain long-duration insurance and reinsurance contracts; |
• | increases in costs associated with third-party reinsurance, or decreased ability to obtain reinsurance at acceptable terms; and |
• | increased likelihood of, or increased magnitude of, asset impairments caused by market fluctuations. |
• | lower levels of consumer demand for and ability to afford our products that decreased and may in the future continue to decrease revenues and profitability; |
• | increased credit losses across numerous asset classes that could result in widening of credit spreads and higher than expected defaults that could reduce investment asset valuations, decrease fee income and increase statutory capital requirements; |
• | increased market volatility and uncertainty that could decrease liquidity with respect to our assets and increase borrowing costs and limit access to capital markets; |
• | the reduction of investment income generated by our investment portfolio; |
• | impeding our ability to execute strategic transactions or fulfill contractual obligations, including those under ceded or assumed reinsurance contracts; |
• | increased costs associated with third-party reinsurance, or decreased ability to obtain reinsurance on acceptable terms; |
• | increased levels of recapturing liabilities covered by certain reinsurance contracts, including our reinsurance contracts with Fortitude Re; |
• | increasing the potential adverse impact of optional guarantee benefits included in our annuities; |
• | increased frequency of life insurance claims; |
• | the reduction in the availability and effectiveness of hedging instruments; |
• | increased likelihood of customers choosing to defer paying premiums or stop paying premiums altogether and other impacts to policyholder behavior not contemplated in our historical pricing of our products; |
• | increased costs related to our direct and third-party support services, labor and financing as a result of inflationary pressures; |
• | increased policy withdrawals, surrenders and cancellations; |
• | increased likelihood of disruptions in one market or asset class spreading to other markets or asset classes; and |
• | limitations on business activities and increased compliance risks with respect to economic sanctions regulations relating to jurisdictions in which our businesses operate. |
• | the reinsurance transaction performs differently than we anticipated as compared to the original structure, terms or conditions; |
• | the terms of the reinsurance contract do not reflect the intent of the parties to the contract or there is a disagreement between the parties as to their intent; |
• | the terms of the contract are interpreted by a court or arbitration panel differently than expected; |
• | a change in laws and regulations, or in the interpretation of the laws and regulations, materially impacts a reinsurance transaction; or |
• | the terms of the contract cannot be legally enforced. |
• | the requirement that a majority of the board consist of independent directors; |
• | the requirement to have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; |
• | the requirement to have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities, or otherwise have director nominees selected by vote of a majority of the independent directors; and |
• | the requirement for an annual performance evaluation of the nominating and governance and compensation committees. |
• | authorize the issuance of shares of our common stock that could be used by our Board to create voting impediments or to frustrate persons seeking to effect a takeover or gain control; |
• | authorize the issuance of “blank check” preferred stock that could be used by our Board to thwart a takeover attempt; |
• | provide that vacancies on our Board (other than vacancies created by the removal of a director by stockholder vote), including vacancies resulting from an enlargement of our Board, may be filled only by a majority vote of directors then in office; and |
• | establish advance notice requirements for nominations of candidates for election as directors or to bring other business before an annual meeting of our stockholders. |
• | any breach of the director’s duty of loyalty; |
• | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; |
• | under Section 174 of the DGCL (unlawful dividends); or |
• | any transaction from which the director derives an improper personal benefit. |
• | any derivative action or proceeding brought on our behalf; |
• | any action asserting a claim of breach of a fiduciary duty owed to us or our stockholders by any of our current or former directors, officers or employees; |
• | any action asserting a claim against us, or any director, officer or employee arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation or our amended and restated bylaws, including any suit or proceeding regarding indemnification or advancement or reimbursement of expenses; or |
• | any action asserting a claim that is governed by the internal affairs doctrine. |
• | industry or general market conditions; |
• | domestic and international economic factors unrelated to our performance; |
• | changes in our customers’ preferences; |
• | new regulatory pronouncements and changes in regulatory guidelines; |
• | lawsuits, enforcement actions and other claims by third parties or governmental authorities; |
• | adverse publicity related to us or another industry participant; |
• | actual or anticipated fluctuations in our operating results; |
• | any future issuance by us of senior or subordinated debt securities or preferred stock or other equity securities that rank senior to our common stock; |
• | changes in securities analysts’ estimates of our financial performance, or unfavorable or misleading research coverage and reports by industry analysts; |
• | lack of, or discontinuation of, research coverage and reports by industry analysts; |
• | action by institutional stockholders or other large stockholders (including AIG), including future sales of our common stock; |
• | failure to meet any guidance given by us or any change in any guidance given by us, or changes by us in our guidance practices; |
• | announcements by us of significant impairment charges; |
• | speculation in the press or investment community; |
• | investor perception of us and our industry; |
• | changes in market valuations or earnings of similar companies; |
• | announcements by us or our competitors of significant contracts, acquisitions, dispositions or strategic partnerships; |
• | war, terrorist acts and epidemic disease; |
• | any future sales of our common stock or other securities; |
• | additions or departures of key personnel; and |
• | misconduct or other improper actions of our employees. |
• | sustained low, declining or negative interest rates, rapidly increasing interest rates or changes to credit spreads; |
• | the deterioration of economic conditions, changes in market conditions, weakening in capital markets, the rise of inflation or geopolitical tensions, including the armed conflict between Ukraine and Russia; |
• | the impact of COVID-19, which will depend on future developments, including with respect to new variants, that are uncertain and cannot be predicted; |
• | declines or volatility in equity markets; |
• | the unpredictability of the amount and timing of insurance liability claims; |
• | unavailable, uneconomical or inadequate reinsurance; |
• | a failure by Fortitude Re to perform its obligations under its reinsurance agreements; |
• | acceleration of the amortization of deferred policy acquisition costs, or the recording of additional liabilities for future policy benefits by our subsidiaries due to interest rate fluctuations, increased lapses and surrenders, declining investment returns and other events; |
• | the realization of, or future impairments resulting from, gross unrealized losses on fixed maturity securities; |
• | the inaccuracy of the methodologies, estimations and assumptions underlying our valuation of investments and derivatives; |
• | our limited ability to access funds from our subsidiaries; |
• | our indebtedness and the degree to which we are leveraged; |
• | our potential inability to refinance all or a portion of our indebtedness to obtain additional financing; |
• | our inability to generate cash to meet our needs due to the illiquidity of some of our investments; |
• | a downgrade in the IFS ratings of our insurance companies and a downgrade in our credit ratings; |
• | our exposure to liquidity and other risks due to participation in a securities lending program and a repurchase program; |
• | changes in the method for determining LIBOR, the upcoming phasing out of LIBOR and uncertainty related to LIBOR replacement rates such as SOFR or SONIA; |
• | exposure to credit risk due to nonperformance or defaults by our counterparties; |
• | our ability to adequately assess risks and estimate losses when pricing for our products; |
• | volatility of our results due to guarantees within certain of our products; |
• | our exposure to counterparty credit risk due to our use of derivative instruments to hedge market risks associated with our liabilities; |
• | difficulty in marketing and distributing products through our current and future distribution channels and the use of third parties; |
• | the highly competitive nature of our Group Retirement segment, consolidated plan sponsors and the potential for redirection of plan sponsor assets; |
• | the inadequate and unanticipated performance of third parties that we rely upon to provide certain business and administrative services on our behalf; |
• | our inability to maintain the availability of our critical technology systems and data and safeguard the confidentiality and integrity of our data; |
• | the ineffectiveness of our risk management policies and procedures; |
• | significant legal, governmental or regulatory proceedings; |
• | the ineffectiveness of new elements of our business strategy in accomplishing our objectives; |
• | the intense competition we face in each of our business lines and the technological changes that may present new and intensified challenges to our business; |
• | catastrophes, including those associated with climate change and pandemics; |
• | material changes to, or termination of, our significant investment advisory contracts with other parties, including Fortitude Re; |
• | changes in accounting principles and financial reporting requirements; |
• | our foreign operations, which may expose us to risks that may affect our operations; |
• | business or asset acquisitions and dispositions that may expose us to certain risks; |
• | changes in U.S. federal income or other tax laws or the interpretation of tax laws; |
• | our inability to protect our intellectual property and our exposure to infringement claims; |
• | changes in laws and regulations that may affect our operations, increase our insurance subsidiary capital requirements or reduce our profitability; |
• | our potential to be deemed an “investment company” under the Investment Company Act, which could make it impractical for us to continue our business as contemplated; |
• | new laws and regulations, both domestically and internationally; |
• | our potential exposure to the USA PATRIOT Act, the Foreign Corrupt Practices Act, the regulations administered by the U.S. Department of the Treasury, Office of Foreign Assets Control and similar laws and regulations; |
• | differences between actual experience and the estimates used in the preparation of financial statements and modeled results used in various areas of our business; |
• | differences in actual experience and the assumptions and estimates used in preparing projections for our financial goals, reserves and cash flows; |
• | the ineffectiveness of our productivity improvement initiatives in yielding our expected expense reductions and improvements in operational and organizational efficiency; |
• | recognition of an impairment of our goodwill or the establishment of an additional valuation allowance against our deferred income tax assets as a result of our business lines underperforming or their estimated fair values declining; |
• | our inability to attract and retain the key employees and highly skilled people we need to support our business, including in light of current competition for talent; |
• | difficulties in detecting and preventing employee error and misconduct; |
• | the termination by Blackstone IM of the SMAs to manage portions of our investment portfolio, risks related to limitations on our ability to terminate the Blackstone IM arrangements; |
• | our limited ability to pursue certain investment opportunities and retain well-performing investment managers due to our exclusive investment management arrangements with Blackstone IM in relation to certain asset classes; |
• | the historical performance of AMG and Blackstone IM not being indicative of the future results of our investment portfolio, our future results or any returns expected on our common shares; |
• | ineffective management of our investment portfolio or harm to our business reputation due to increased regulation or scrutiny of alternative investment advisers and certain trading methods; |
• | our failure to replicate or replace functions, systems and infrastructure provided by AIG or certain of its affiliates (including through shared service contracts) or our loss of benefits from AIG’s global contracts, and AIG’s failure to perform the services provided for in the Transition Services Agreement, as well as incremental costs we expect to incur as a stand-alone public company; |
• | the unreliability of our historical consolidated financial data as an indicator of our future results; |
• | costs associated with rebranding; |
• | additional expenses requiring us to implement future operational and organizational efficiencies due to our restructuring initiatives in connection with our separation from AIG; |
• | the significant influence that AIG has over us; |
• | our status as a “controlled company” within the meaning of the NYSE rules; |
• | conflicts of interest that may arise because affiliates of our controlling stockholder have continuing agreements and business relationships with us, or conflicts of interest with a third party that owns a minority investment in us; |
• | actual or potential conflicts of interest with certain of our directors because of their AIG equity ownership or their current or former AIG positions; |
• | our indemnification obligations in favor of AIG; |
• | the interpretation of insurance holding company laws which may deem that investors in AIG “control” us following their investment in our common stock; |
• | potentially higher U.S. federal income taxes due to our inability to file a single U.S. consolidated federal income tax return following our separation from AIG; |
• | our separation from AIG causing an “ownership change” for U.S. federal income tax purposes; |
• | risks associated with the Tax Matters Agreement with AIG; |
• | our potential liability for U.S. income taxes of the entire AIG Consolidated Tax Group for all taxable years or portions thereof in which we (or our subsidiaries) were members of such group; |
• | the discouragement, delay or prevention of a change of control of our company and the impact on the trading price of our common stock as a result of anti-takeover provisions in our amended and restated certificate of incorporation and amended and restated bylaws; |
• | limitations on personal liability of our directors for breach of fiduciary duty under the DGCL; |
• | the exclusive forum provisions for certain litigation in our amended and restated certificate of incorporation; |
• | risks associated with our ability to waive any interest or expectancy in corporate opportunities presented to AIG and Blackstone; |
• | the increased expense and time associated with fulfilling our obligations incident to being a public company, including compliance with the Exchange Act, Sarbanes-Oxley Act of 2002 and Dodd-Frank, and risks associated with delays or difficulties in satisfying such obligations; |
• | the lack of a prior public market for our common stock and the potential that the market price of our common stock could decline; |
• | the potential that the market price of our common stock could decline due to future sales of shares by our existing stockholders, including AIG or Blackstone; |
• | the potential inability of our stockholders to realize a control premium if AIG sells a controlling interest in us to a third party in a private transaction; and |
• | applicable insurance laws, which could make it difficult to effect a change of control of our company. |
• | Maintaining our stand-alone credit ratings; |
• | Targeting a financial leverage ratio of between approximately 25% to 30%. Financial leverage ratio is the ratio of financial debt to the sum of financial debt plus Adjusted Book Value plus non-redeemable non-controlling interests; |
• | Liquidity at our holding company, Corebridge, sufficient to cover one year of its expenses; and |
• | Entering into new financing arrangements that are supported solely on the basis of our stand-alone credit profile. |
• | Letters of credit with an aggregate principal amount of approximately $ , which are expected to be used to support statutory recognition of ceded reinsurance by one of our U.S. life and retirement subsidiaries to an affiliate; and |
• | A revolving credit facility of approximately $2.5 billion. |
• | $1.0 billion aggregate principal amount of 3.500% Senior Notes due 2025 (the “2025 Notes”); |
• | $1.25 billion aggregate principal amount of 3.650% Senior Notes due 2027 (the “2027 Notes”); |
• | $1.0 billion aggregate principal amount of 3.850% Senior Notes due 2029 (the “2029 Notes”); |
• | $1.5 billion aggregate principal amount of 3.900% Senior Notes due 2032 (the “2032 Notes”); |
• | $0.5 billion aggregate principal amount of 4.350% Senior Notes due 2042 (the “2042 Notes”); and |
• | $1.25 billion aggregate principal amount of 4.400% Senior Notes due 2052 (the “2052 Notes” and together with the 2025 Notes, the 2027 Notes, the 2029 Notes, the 2032 Notes and the 2042 Notes, the “Notes”). |
• | liens that we may create, incur, assume, or permit in respect of our properties, assets or certain equity interests of certain of our subsidiaries, subject to exceptions; |
• | our ability to effect any merger, consolidation, disposal of all or substantially all of our assets, or to liquidate or dissolve, subject to exceptions; |
• | engage in any business other than the businesses of the type we and our subsidiaries currently conduct; and |
• | activities which may cause us to violate any laws or regulations governing sanctions, bribery and anti-corruption. |
| | As of December 31, 2021 | ||||
(dollars in millions, except share amounts) | | | Actual | | | Pro Forma |
Cash | | | $537 | | | 1,220 |
Debt(1): | | | | | ||
Short-term debt | | | 8,317 | | | — |
Long-term debt: | | | | | ||
2025 Notes | | | — | | | 1,000 |
2027 Notes | | | — | | | 1,250 |
2029 Notes | | | — | | | 1,000 |
2032 Notes | | | — | | | 1,500 |
2042 Notes | | | — | | | 500 |
2052 Notes | | | — | | | 1,250 |
Other long-term debt | | | 427 | | | 2,927 |
Debt of consolidated investment entities | | | 6,936 | | | 6,936 |
Total debt | | | $15,680 | | | $16,363 |
Redeemable noncontrolling interest(2) | | | 83 | | | 83 |
Equity: | | | | | ||
Common stock class A, $1.00 par value; shares authorized; shares issued(3) | | | — | | | — |
Common stock class B, $1.00 par value; shares authorized; shares issued(3) | | | — | | | — |
Additional paid-in capital | | | 8,060 | | | 8,060 |
Retained earnings | | | 8,859 | | | 8,750 |
Accumulated other comprehensive income | | | 10,167 | | | 10,452 |
Total Corebridge Shareholder’s equity | | | 27,086 | | | 27,262 |
Nonredeemable noncontrolling interest | | | 1,759 | | | 1,759 |
Total equity | | | 28,845 | | | 29,021 |
Total capitalization | | | $44,525 | | | 45,384 |
(1) | See “Recapitalization.” |
(2) | Redeemable noncontrolling interest has been excluded from the total capitalization of Corebridge. See Note 16 to the audited consolidated financial statements. |
(3) | Adjusted to give effect to the -for- stock split on our common stock to be effected prior to this offering. |
| | | | Transaction Accounting Adjustments | | | Autonomous Entity Adjustments | | | ||||||||||||
| | Historical | | | Recapitalization | | | Affordable Housing | | | Tax Deconsolidation | | | Investment Management | | | Other Costs | | | Pro Forma | |
(in millions, except for share data) | | | | | | | | | | | | | | | |||||||
Assets: | | | | | | | | | | | | | | | |||||||
Investments: | | | | | | | | | | | | | | | |||||||
Fixed maturity securities: | | | | | | | | | | | | | | | |||||||
Bonds available for sale | | | $198,568 | | | — | | | — | | | — | | | — | | | — | | | $198,568 |
Other bond securities | | | 2,082 | | | — | | | — | | | — | | | — | | | — | | | 2,082 |
Equity securities | | | 242 | | | — | | | — | | | — | | | — | | | — | | | 242 |
Mortgage and other loans receivable | | | 39,388 | | | — | | | — | | | — | | | — | | | — | | | 39,388 |
Other invested assets | | | 10,567 | | | — | | | — | | | — | | | — | | | — | | | 10,567 |
Short-term investments | | | 5,471 | | | — | | | — | | | — | | | — | | | — | | | 5,471 |
Total Investments | | | 256,318 | | | — | | | — | | | — | | | — | | | — | | | 256,318 |
Cash | | | 537 | | | 683 (a) | | | — | | | — | | | — | | | — | | | 1,220 |
Accrued investment income | | | 1,760 | | | — | | | — | | | — | | | — | | | — | | | 1,760 |
Premiums and other receivables | | | 884 | | | — | | | — | | | — | | | — | | | — | | | 884 |
Reinsurance assets - Fortitude Re | | | 28,472 | | | — | | | — | | | — | | | — | | | — | | | 28,472 |
Reinsurance assets - other | | | 2,932 | | | — | | | — | | | — | | | — | | | — | | | 2,932 |
Deferred income taxes | | | 4,837 | | | — | | | — | | | (109) (b) | | | — | | | — | | | 4,728 |
Deferred policy acquisition costs and value of business acquired | | | 8,058 | | | — | | | — | | | — | | | — | | | — | | | 8,058 |
Other assets | | | 3,303 | | | 285 (a) | | | — | | | — | | | — | | | — | | | 3,588 |
Separate account assets | | | 109,111 | | | — | | | — | | | — | | | — | | | — | | | 109,111 |
Total assets | | | $416,212 | | | 968 | | | — | | | (109) | | | — | | | — | | | $417,071 |
| | | | | | | | | | | | | | ||||||||
Liabilities: | | | | | | | | | | | | | | | |||||||
Future policy benefits for life and accident and health insurance contracts | | | $57,751 | | | — | | | — | | | — | | | — | | | — | | | $57,751 |
Policyholder contract deposits | | | 156,846 | | | — | | | — | | | — | | | — | | | — | | | 156,846 |
Other policyholder funds | | | 2,849 | | | — | | | — | | | — | | | — | | | — | | | 2,849 |
Fortitude Re funds withheld payable | | | 35,144 | | | — | | | — | | | — | | | — | | | — | | | 35,144 |
Other liabilities | | | 9,903 | | | — | | | — | | | — | | | — | | | — | | | 9,903 |
Short-term debt | | | 8,317 | | | (8,317) (a) | | | — | | | — | | | — | | | — | | | — |
Long-term debt | | | 427 | | | 9,000 (a) | | | — | | | — | | | — | | | — | | | 9,427 |
Debt of consolidated investment entities | | | 6,936 | | | — | | | — | | | — | | | — | | | — | | | 6,936 |
Separate account liabilities | | | 109,111 | | | — | | | — | | | — | | | — | | | — | | | 109,111 |
Total liabilities | | | $387,284 | | | 683 | | | — | | | — | | | — | | | — | | | $387,967 |
Redeemable noncontrolling interest | | | $83 | | | | | | | | | | | | | $83 | |||||
Corebridge Shareholders' equity | | | | | | | | | | | | | | | |||||||
Class A Common stock, $1.00 par value, 180,000 shares authorized; 90,100 shares issued | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Class B Common stock, $1.00 par value, 20,000 shares authorized; 9,900 shares issued | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Additional paid-in capital | | | 8,060 | | | — | | | — | | | — | | | — | | | — | | | 8,060 |
Retained earnings | | | 8,859 | | | — | | | — | | | (109) (b) | | | — | | | — | | | 8,750 |
Accumulated other comprehensive income (loss) | | | 10,167 | | | 285 (a) | | | — | | | — | | | — | | | — | | | 10,452 |
Total Corebridge Shareholders' equity | | | 27,086 | | | 285 | | | — | | | (109) | | | — | | | — | | | 27,262 |
Non-redeemable noncontolling interests | | | 1,759 | | | — | | | — | | | — | | | — | | | — | | | 1,759 |
Total Equity | | | $28,845 | | | $285 | | | — | | | (109) | | | — | | | — | | | $29,021 |
Total Liabilities, redeemable noncontrolling interest and equity | | | $416,212 | | | 968 | | | — | | | (109) | | | — | | | — | | | $417,071 |
| | | | Transaction Accounting Adjustments | | | Autonomous Entity Adjustments | | | ||||||||||||
| | Historical | | | Recapitalization | | | Affordable Housing | | | Tax Deconsolidation | | | Investment Management | | | Other Costs | | | Pro Forma | |
(dollars in millions, except per common share data) | | | | ||||||||||||||||||
Revenues: | | | | | | | | | | | | | | | |||||||
Premiums | | | $5,637 | | | — | | | — | | | — | | | — | | | — | | | 5,637 |
Policy Fees | | | 3,051 | | | — | | | — | | | — | | | — | | | — | | | 3,051 |
Net Investment Income: | | | | | | | | | | | | | | | |||||||
Net investment income: excluding Fortitude Re funds withheld assets | | | 9,897 | | | — | | | (309) (c) | | | — | | | (147) (d) | | | — | | | 9,441 |
Net investment income: Fortitude Re funds withheld assets | | | 1,775 | | | — | | | — | | | — | | | — | | | — | | | 1,775 |
Total net investment income | | | $11,672 | | | $— | | | $(309) | | | $— | | | $(147) | | | $— | | | $11,216 |
Net Realized gains (losses): | | | | | | | | | | | | | | | |||||||
Net realized gains (losses) excluding Fortitude Re funds withheld assets and embedded derivative | | | 1,618 | | | — | | | — | | | — | | | — | | | — | | | 1,618 |
Net realized gains (losses) on Fortitude Re funds withheld assets | | | 924 | | | — | | | — | | | — | | | — | | | — | | | 924 |
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative | | | (687) | | | — | | | — | | | — | | | — | | | — | | | (687) |
Total Net realized gains (losses) | | | 1,855 | | | — | | | — | | | — | | | — | | | — | | | 1,855 |
Advisory fee income | | | 597 | | | — | | | — | | | — | | | — | | | — | | | 597 |
Other income | | | 578 | | | — | | | — | | | — | | | — | | | — | | | 578 |
Total Revenues | | | $23,390 | | | — | | | (309) | | | $— | | | $(147) | | | $— | | | $22,934 |
Benefits and expenses: | | | | | | | | | | | | | | | |||||||
Policyholder benefits | | | 8,050 | | | — | | | — | | | — | | | — | | | — | | | 8,050 |
Interest credited to policyholder account balances | | | 3,549 | | | — | | | — | | | — | | | — | | | — | | | 3,549 |
Amortization of deferred policy acquisition costs and value of business acquired | | | 1,057 | | | — | | | — | | | — | | | — | | | — | | | 1,057 |
Non-deferrable insurance commissions | | | 680 | | | — | | | — | | | — | | | — | | | — | | | 680 |
Advisory fee expenses | | | 322 | | | — | | | — | | | — | | | — | | | — | | | 322 |
General operating | | | 2,104 | | | — | | | (16) (c) | | | — | | | — | | | 103 (e) | | | 2,191 |
Interest expense | | | 389 | | | 373 (a) | | | (107) (c) | | | — | | | — | | | — | | | 655 |
Loss on extinguishment of debt | | | 219 | | | — | | | — | | | — | | | — | | | — | | | 219 |
Net (gain) loss on divestitures | | | (3,081) | | | — | | | — | | | — | | | — | | | — | | | (3,081) |
Loss on Fortitude Re Reinsurance Contract | | | (26) | | | — | | | — | | | — | | | — | | | — | | | (26) |
Total benefits and expenses | | | $13,263 | | | $373 | | | $(123) | | | $— | | | $— | | | $103 | | | $13,616 |
Income (loss) before income tax expense | | | 10,127 | | | (373) | | | (186) | | | — | | | (147) | | | (103) | | | 9,318 |
Income tax expense (benefit): | | | | | | | | | | | | | | | |||||||
Current | | | 1,946 | | | (78) (g) | | | (40) (g) | | | 138 (b) | | | (31) (g) | | | (22) (g) | | | 1,913 |
Deferred | | | (103) | | | — | | | — | | | — | | | — | | | — | | | (103) |
Income tax expense (benefit): | | | $1,843 | | | $(78) | | | $(40) | | | $138 | | | $(31) | | | $(22) | | | $1,810 |
Net income (loss) | | | $8,284 | | | $(295) | | | $(146) | | | $(138) | | | $(116) | | | $(81) | | | $7,508 |
Less: | | | | | | | | | | | | | | | |||||||
Net income (loss) attributable to noncontrolling interests | | | $929 | | | $— | | | $(68) (c) | | | — | | | — | | | — | | | $861 |
Net income (loss) attributable to Corebridge | | | $7,355 | | | $(295) | | | $(78) | | | $(138) | | | $(116) | | | $(81) | | | $6,647 |
| | | | | | | | | | | | | |
| | | | Transaction Accounting Adjustments | | | Autonomous Entity Adjustments | | | ||||||||||||
| | Historical | | | Recapitalization | | | Affordable Housing | | | Tax Deconsolidation | | | Investment Management | | | Other Costs | | | Pro Forma | |
(dollars in millions, except per common share data) | | | | ||||||||||||||||||
Income (loss) per common share attributable to Corebridge common shareholders: | | | | | | | | | | | | | | | |||||||
Class A - Basic and diluted | | | $ (f) | | | $ | | | | | | | | | | | |||||
Class B - Basic and diluted | | | $ (f) | | | $ | | | | | | | | | | | |||||
| | | | | | | | | | | | | | ||||||||
Weighted average shares outstanding: | | | | | | | | | | | | | | | |||||||
Class A - Basic and diluted | | | (f) | | | | | | | | | | | | | ||||||
Class B - Basic and diluted | | | (f) | | | | | | | | | | | | |
(a) | The unaudited pro forma condensed balance sheet reflects our planned Recapitalization, which, depending on market conditions and other factors, we currently anticipate issuing a portion of the debt securities prior to the consummation of this offering with the remainder to be completed within approximately 12 to 18 months thereafter. Corebridge intends to use the net proceeds from these anticipated financings to repay the outstanding principal balance and interest on the $8.3 billion owed by us to AIG Inc., or if drawn, to repay the DDTL facilities, with any excess to be retained by Corebridge as part of its liquidity pool. |
Facility | | | Principal amounts outstanding |
| | ($ millions) | |
Affiliated senior promissory note with AIG, Inc. | | | $8,317 |
Senior Notes | | | $6,500 |
Hybrid Notes | | | $2,500 |
Repayment of Affiliated senior promissory note with AIG, Inc. | | | ($8,317) |
AIGLH notes and bonds payable | | | $200 |
AIGLH junior subordinated debt | | | $227 |
Total Pro Forma long-term debt | | | $9,427 |
(b) | We are currently included in the AIG Consolidated Tax Group. However, upon AIG’s ownership interest in Corebridge decreasing below 80%, we will no longer be included in the AIG Consolidated Tax Group. This Tax Deconsolidation is expected to occur upon completion of this offering. In addition, we will not be permitted to join in the filing of a U.S. consolidated federal income tax return with AGC and its directly owned life insurance subsidiaries for the five-year waiting period. Instead, AGC and its directly owned life insurance company subsidiaries are expected to file separately as members of the AGC consolidated U.S. federal income tax return during the five-year waiting period. See “Risk Factors—Risks Relating to Our Separation from AIG—Our inability to file a single U.S. consolidated federal income tax return following separation from AIG may result in increased U.S. federal income taxes.” Upon the Tax Deconsolidation from the AIG Consolidated Tax Group, absent any tax planning strategies, our net operating losses and foreign tax credit carryforwards generated by the non-life insurance companies will more-likely-than-not expire unutilized. Additionally, based on the positive and negative evidence that exists as of December 31, 2021, an additional valuation allowance of $109 million is expected to be established with respect to such tax attribute carryforwards and is reflected in the pro forma adjustments. Following the five-year waiting period, AGC and its life insurance subsidiaries are expected to join our U.S. consolidated federal income tax return. Principles similar to the foregoing may apply to state and local income tax liabilities in jurisdictions that conform to federal rules. |
(c) | Reflects the elimination of the historical results of the affordable housing portfolio sold to BREIT in the fourth quarter of 2021. The $309 million of net investment income, $16 million of general operating and other expenses, $107 million of interest expense, $40 million of income tax and $68 million of net income attributable to non-controlling interests eliminated in the unaudited pro forma condensed consolidated statement of income (loss) will not recur in our income beyond 12 months after the transaction. Additionally, the unaudited pro forma condensed consolidated statement of income (loss) reflects the pre-tax gain of $3.0 billion that we incurred related to the sale of the affordable housing portfolio. While this gain has been presented in the unaudited pro forma condensed consolidated statement of income (loss) as the statement is prepared as if the transaction occurred as of January 1, 2021, this gain will not recur in our income beyond 12 months after the transaction. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Significant Factors Impacting Our Results—Affordable Housing Sale” and Note 1 to our audited consolidated financial statements. |
(d) | Pursuant to our Commitment Letter with Blackstone IM and the SMAs, Blackstone IM serves as the exclusive external investment manager for certain asset classes in the majority of our life insurance company subsidiaries. As of December 31, 2021, Blackstone IM manages an initial $50 billion of our existing investment portfolio. Pursuant to the Commitment Letter, we must use commercially reasonable efforts to transfer certain minimum amounts of assets to Blackstone IM for management each quarter for the next five years beginning in the fourth quarter of 2022, such that the amount under Blackstone IM’s management is expected to increase by increments of $8.5 billion per year to an aggregate of $92.5 billion by the third quarter of 2027. |
(e) | We expect to incur certain additional costs related to becoming a standalone public company, including costs incurred under the Transition Services Agreement, which will be executed prior to the consummation of this offering. These costs are expected to be partially offset by fees associated with reverse transition services provided to AIG under the Transition Services Agreement. We also expect to incur additional costs associated with employees transferred to us from AIG. Accordingly, the unaudited pro forma condensed consolidated financial information has been adjusted to reflect the net difference between the expenses expected to be incurred by the Company as an autonomous entity and the allocated expenses from AIG as reflected in the Company’s 2021 audited consolidated financial statements. A portion of these other costs relate to AIGT and Eastgreen, which were purchased by us on February 28, 2022. While the unaudited pro forma condensed consolidated statement of income (loss) reflects these costs, no pro forma adjustments have been made in the unaudited pro forma condensed balance sheet as these adjustments were determined to be immaterial. The additional expenses have been estimated based on assumptions that management believes are reasonable. However, actual additional costs that will be incurred could be different, potentially materially, from our estimates and would depend on several factors, including the economic environment and strategic decisions. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Separation Costs.” |
(f) | The number of Corebridge shares used to compute basic and diluted earnings per share for the year ended December 31, 2021 contemplates a stock split of to 1 share to be effectuated prior to the consummation of this offering. |
(g) | Reflects the tax effects of the pro forma adjustments at the applicable statutory income tax rates. |
• | Premiums are principally derived from our traditional life insurance and certain annuity products including PRT transactions and structured settlements with life contingencies. Our premium income is driven by growth in new policies and contracts written and persistency of our in-force policies, both of which are influenced by a combination of factors including our efforts to attract and retain customers and market conditions that influence demand for our products; |
• | Policy fees are principally derived from our individual retirement, group retirement, universal life insurance, COLI-BOLI and SVW products. Our policy fees typically vary directly with the underlying account value or benefit base of our annuities. Account value and benefit base are influenced by changes in economic conditions, primarily equity market returns, as well as net flows; |
• | Net investment income from our investment portfolio varies as a result of the yield, allocation and size of our investment portfolio, which are, in turn, a function of capital market conditions and net flows into our total investments, as well as the expenses associated with managing our investment portfolio; |
• | Net realized gains (losses), include changes in the Fortitude Re funds withheld embedded derivative, risk management related derivative activities, changes in the fair value of embedded derivatives in certain of our insurance products and trading activity within our investment portfolio, including trading activity related to the Fortitude Re modco. Net realized gains (losses) vary due to the timing of sales of investments as well as changes in the fair value of embedded derivatives in certain of our insurance products and derivatives utilized to hedge certain insurance liabilities; and |
• | Advisory fee income and other income includes fees from registered investment advisory services, 12b-1 fees (marketing and distribution fees paid by mutual funds), other asset management fee income, and commission-based broker dealer services. |
• | Policyholder benefits are driven primarily by customer withdrawals and surrenders which change in response to changes in capital market conditions, changes in policy reserves as well as updates to assumptions related to future policyholder behavior, mortality and longevity; |
• | Interest credited to policyholder account balances varies in relation to the amount of the underlying account value or benefit base and also includes changes in the fair value of certain embedded derivatives related to our insurance products; |
• | Amortization of DAC and value of business acquired. DAC and value of business acquired (“VOBA”) for traditional life insurance products are amortized, with interest, over the premium paying period. DAC and VOBA related to investment-oriented contracts, such as universal life insurance, and fixed, fixed index and variable annuities, are amortized, with interest, in relation to the estimated gross profits to be realized over the estimated lives of the contracts; |
• | General operating and other expenses include expenses associated with conducting our business, including salaries, other employee-related compensation, and other operating expenses such as professional services or travel; and |
• | Interest expense represents the charges associated with our external debt obligations, including debt of consolidated investment entities. This expense varies based on the amount of debt on our balance sheet, as well as the rates of interest associated with those obligations. Interest expense related to consolidated investment entities principally relates to variable interest entities (“VIEs”) for which we are the primary beneficiary, however, creditors or beneficial interest holders of VIEs generally only have recourse to the assets and cash flows of the VIEs and do not have recourse to us except in limited circumstances when we have provided a guarantee to the VIE’s interest holders. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Net investment income - funds withheld assets | | | $1,775 | | | $1,427 | | | $1,598 |
Net realized gains (losses) on Fortitude Re funds withheld assets: | | | | | | | |||
Net realized gains - funds withheld assets | | | 924 | | | 1,002 | | | 262 |
Net realized losses - embedded derivatives | | | (687) | | | (3,978) | | | (5,167) |
Net realized gains (losses) on Fortitude Re funds withheld assets | | | 237 | | | (2,976) | | | (4,905) |
Income (loss) before income tax benefit (expense) | | | 2,012 | | | (1,549) | | | (3,307) |
Income tax benefit (expense)* | | | (423) | | | 325 | | | 694 |
Net income (loss) | | | 1,589 | | | (1,224) | | | (2,613) |
Change in unrealized appreciation (depreciation) of the invested assets supporting the Fortitude Re modco arrangement classified as available for sale* | | | (1,488) | | | 1,165 | | | 2,479 |
Comprehensive income (loss) | | | $101 | | | $(59) | | | $(134) |
* | The income tax expense (benefit) and the tax impact in OCI was computed using Corebridge’s U.S. statutory tax rate of 21%. |
• | the economic hedge target includes 100% of rider fees in present value calculations; the GAAP valuation reflects only those fees attributed to the embedded derivative such that the initial value at contract issue equals zero; |
• | the economic hedge target uses best estimate actuarial assumptions and excludes explicit risk margins used for GAAP valuation, such as margins for policyholder behavior, mortality and volatility; and |
• | the economic hedge target excludes the non-performance, or “own credit” risk adjustment used in the GAAP valuation, which reflects a market participant’s view of our claims-paying ability by incorporating a different spread (the “NPA spread”) to the curve used to discount projected benefit cash flows. Because the discount rate includes the NPA spread and other explicit risk margins, the GAAP valuation has different sensitivities to movements in interest rates and other market factors, and to changes from actuarial assumption updates, than the economic hedge target. For more information on our valuation methodology for embedded derivatives within policyholder contract deposits, see Note 4 to our audited consolidated financial statements. |
• | basis risk due to the variance between expected and actual fund returns, which may be either positive or negative; |
• | realized volatility versus implied volatility; |
• | actual versus expected changes in the hedge target driven by assumptions not subject to hedging, particularly policyholder behavior; and |
• | risk exposures that we have elected not to explicitly or fully hedge. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Change in fair value of embedded derivatives, excluding update of actuarial assumptions and NPA(a)(b) | | | $2,422 | | | $(1,149) | | | $(195) |
Change in fair value of variable annuity hedging portfolio: | | | | | | | |||
Fixed maturity securities(c) | | | 56 | | | 44 | | | 194 |
Interest rate derivative contracts | | | (600) | | | 1,342 | | | 1,029 |
Equity derivative contracts | | | (1,217) | | | (679) | | | (1,274) |
Change in fair value of variable annuity hedging portfolio | | | (1,761) | | | 707 | | | (51) |
Change in fair value of embedded derivatives excluding update of actuarial assumptions and NPA, net of hedging portfolio | | | 661 | | | (442) | | | (246) |
Change in fair value of embedded derivatives due to NPA spread | | | (68) | | | 50 | | | (314) |
Change in fair value of embedded derivatives due to change in NPA volume | | | (383) | | | 404 | | | 202 |
Change in fair value of embedded derivatives due to update of actuarial assumptions | | | (60) | | | 194 | | | 219 |
Total change due to update of actuarial assumptions and NPA | | | (511) | | | 648 | | | 107 |
Net impact on pre-tax income (loss) | | | 150 | | | 206 | | | (139) |
Impact to Consolidated Income Statement line | | | | | | | |||
Net investment income, net of related interest credited to policyholder account balances | | | 56 | | | 44 | | | 194 |
Net realized gains (losses) | | | 94 | | | 162 | | | (333) |
Net impact on pre-tax income (loss) | | | 150 | | | 206 | | | (139) |
Net change in value of economic hedge target and related hedges | | | | | | | |||
Net impact on economic gains | | | $109 | | | $295 | | | $261 |
(a) | The non-performance risk adjustment (“NPA”) adjusts the valuation of derivatives to account for our own nonperformance risk in the fair value measurement of all derivative net liability positions. |
(b) | The 2020 and 2019 change in fair value of embedded derivatives, excluding update of actuarial assumptions and NPA was revised from $(1,145) million to $(1,149) million and from $(156) million to $(195) million for 2020 and 2019, respectively. These revisions have no impact on Corebridge’s consolidated financial statements and are not considered material to the previously issued financial statements. |
(c) | Beginning in July 2019, the fixed maturity securities portfolio used in the hedging program was rebalanced to reposition the portfolio from a duration and issuer perspective. As part of this rebalancing, fixed maturity securities where we elected the fair value option were sold. Later in the quarter, as new fixed maturity securities were purchased, they were classified as available for sale. The change in fair value of available-for-sale fixed maturity securities recognized as a component of OCI was $(122) million, and $217 million for the years ended December 31, 2021 and 2020, respectively. 2021 reflected losses due to higher interest rates. The gain in 2020 reflected the impact of decreases in interest rates, and tightening credit spreads. |
At December 31, (in millions) | | | 2021 | | | 2020 |
Variable annuities GMWB | | | $2,472 | | | $3,702 |
Fixed index annuities, including certain GMWB | | | 6,445 | | | 5,631 |
Index Life | | | 765 | | | 649 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Premiums | | | $(41) | | | $— | | | $— |
Policy fees | | | (74) | | | (106) | | | (24) |
Interest credited to policyholder account balances | | | (54) | | | (6) | | | 19 |
Amortization of deferred policy acquisition costs | | | (143) | | | 225 | | | 194 |
Policyholder benefits | | | 86 | | | (246) | | | (147) |
Increase (Decrease) in adjusted pre-tax operating income | | | (226) | | | (133) | | | 42 |
Change in DAC related to net realized gains (losses) | | | 32 | | | (44) | | | (17) |
Net realized gains | | | 50 | | | 142 | | | 180 |
Increase (Decrease) in pre-tax income | | | $(144) | | | $(35) | | | $205 |
(in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Individual Retirement: | | | | | | | |||
Fixed annuities | | | $(267) | | | $(77) | | | $82 |
Variable annuities | | | 7 | | | 13 | | | (5) |
Fixed index annuities | | | (60) | | | (30) | | | (140) |
Total Individual Retirement | | | (320) | | | (94) | | | (63) |
Group Retirement | | | (5) | | | 68 | | | (17) |
Life Insurance | | | 99 | | | (108) | | | 122 |
Institutional Markets | | | — | | | 1 | | | — |
Total increase (decrease) in adjusted pre-tax operating income from update of assumptions* | | | $(226) | | | $(133) | | | $42 |
* | Liabilities ceded to Fortitude Re are reported in Corporate and Other. There was no impact to adjusted pre-tax operating income due to the annual update of actuarial assumptions as these liabilities are 100 percent ceded. |
• | Requires the review and if necessary, update of future policy benefit assumptions at least annually for traditional and limited pay long duration contracts, with the recognition and separate presentation of any resulting re-measurement gain or loss (except for discount rate changes as noted above) in the income statement. |
• | Simplifies the amortization of DAC to a constant level basis over the expected term of the related contracts with adjustments for unexpected terminations, but no longer requires an impairment test. |
• | Increased disclosures of disaggregated roll-forwards of several balances, including: liabilities for future policy benefits, deferred acquisition costs, account balances, market risk benefits, separate account liabilities and information about significant inputs, judgments and methods used in measurement and changes thereto and impact of those changes. |
• | equity market returns, forward interest rates and policyholder behavior based on our current best estimate assumptions which include dynamic variables to reflect the impact of a change in market levels; |
• | our projected amount of new sales in our insurance businesses, which have not been adjusted for the higher assumed forward interest rates or decrease in the equity markets; |
• | the absence of material changes in regulation; |
• | that we have not adopted the new accounting standard for long-duration contracts with respect to the financial goal related our Adjusted ROAE; |
• | effective tax rates; |
• | our degree of leverage and capital structure following the Recapitalization due to indebtedness incurred in connection with the Recapitalization or following consummation of this offering as described under “Recapitalization—Indebtedness Remaining Outstanding Following this Offering;” |
• | limited differences between actual experience and existing actuarial assumptions, including assumptions for which existing experience is limited and experience will emerge over time; |
• | the effectiveness of our policyholder behavior models to predict a policyholder’s decision making and mortality; |
• | the efficacy and maturity of existing actuarial models to appropriately reflect all aspects of our existing and in-force businesses; |
• | the effectiveness and cost of our hedging program and the impact of our hedging strategy on net income volatility and possible negative effects on our statutory capital; |
• | our ability to implement our business strategy; |
• | our ability to implement cost reduction and productivity strategies; |
• | the successful implementation of our key initiatives outlined in “Business—Financial Goals;” |
• | our access to capital; and |
• | general conditions of the capital markets and the markets in which our businesses operate. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Total revenues | | | $23,390 | | | $15,062 | | | $13,210 |
Fortitude Re related items: | | | | | | | |||
Net investment income on Fortitude Re funds withheld assets | | | (1,775) | | | (1,427) | | | (1,598) |
Net realized (gains) on Fortitude Re funds withheld assets | | | (924) | | | (1,002) | | | (262) |
Net realized losses on Fortitude Re funds withheld embedded derivative | | | 687 | | | 3,978 | | | 5,167 |
Subtotal - Fortitude Re related items | | | (2,012) | | | 1,549 | | | 3,307 |
Other non-Fortitude Re reconciling items: | | | | | | | |||
Changes in fair value of securities used to hedge guaranteed living benefits | | | (60) | | | (56) | | | (228) |
Non-operating litigation reserves and settlements | | | — | | | (12) | | | — |
Other (income) - net | | | (37) | | | (53) | | | (42) |
Net realized (gains) losses(a) | | | (791) | | | 916 | | | 551 |
Subtotal - Other non-Fortitude Re reconciling items | | | (888) | | | 795 | | | 281 |
Total adjustments | | | (2,900) | | | 2,344 | | | 3,588 |
Adjusted revenues | | | $20,490 | | | $17,406 | | | $16,798 |
(a) | Represents all net realized gains and losses except gains (losses) related to the disposition of real estate investments and earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income for non-qualifying (economic) hedging or for asset replication is reclassified from net realized gains and losses to specific APTOI line items (e.g., net investment income and interest credited to policyholder account balances) based on the economic risk being hedged. |
• | net pre-tax income (losses) from noncontrolling interests related to consolidated investment entities; |
• | restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization; |
• | non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles; |
• | integration and transaction costs associated with acquiring or divesting businesses; |
• | non-operating litigation reserves and settlements; |
• | loss (gain) on extinguishment of debt; |
• | losses from the impairment of goodwill, if any; and |
• | income and loss from divested or run-off business, if any. |
• | changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; and |
• | deferred income tax valuation allowance releases and charges. |
| | 2021 | | | 2020 | | | 2019 | ||||||||||||||||||||||||||||
Years Ended December 31, (in millions) | | | Pre-Tax | | | Total Tax (Benefit) Charge | | | Non- controlling Interests | | | After Tax | | | Pre-Tax | | | Total Tax (Benefit) Charge | | | Non- controlling Interests | | | After Tax | | | Pre-Tax | | | Total Tax (Benefit) Charge | | | Non- controlling Interests | | | After Tax |
Pre-tax income (loss)/net income (loss) including noncontrolling interests | | | $10,127 | | | $1,843 | | | $— | | | $8,284 | | | $851 | | | $(15) | | | $— | | | $866 | | | $139 | | | $(168) | | | $— | | | $307 |
Noncontrolling interests | | | — | | | — | | | (929) | | | (929) | | | — | | | — | | | (224) | | | (224) | | | — | | | — | | | (257) | | | (257) |
Pre-tax income (loss) / net income attributable to Corebridge | | | 10,127 | | | 1,843 | | | (929) | | | 7,355 | | | 851 | | | (15) | | | (224) | | | 642 | | | 139 | | | (168) | | | (257) | | | 50 |
Fortitude Re related items: | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Net investment income on Fortitude Re funds withheld assets | | | (1,775) | | | (373) | | | — | | | (1,402) | | | (1,427) | | | (300) | | | — | | | (1,127) | | | (1,598) | | | (335) | | | — | | | (1,263) |
Net realized (gains) losses on Fortitude Re funds withheld assets | | | (924) | | | (194) | | | — | | | (730) | | | (1,002) | | | (210) | | | — | | | (792) | | | (262) | | | (55) | | | — | | | (207) |
Net realized losses on Fortitude Re funds withheld embedded derivative | | | 687 | | | 144 | | | — | | | 543 | | | 3,978 | | | 835 | | | — | | | 3,143 | | | 5,167 | | | 1,085 | | | — | | | 4,082 |
Net (gains) losses on Fortitude Re transactions | | | (26) | | | (5) | | | — | | | (21) | | | 91 | | | 19 | | | — | | | 72 | | | — | | | — | | | — | | | — |
Subtotal – Fortitude Re related items | | | (2,038) | | | (428) | | | — | | | (1,610) | | | 1,640 | | | 344 | | | — | | | 1,296 | | | 3,307 | | | 695 | | | — | | | 2,612 |
Other reconciling items: | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Changes in uncertain tax positions and other tax adjustments | | | — | | | 174 | | | — | | | (174) | | | — | | | 119 | | | — | | | (119) | | | — | | | 88 | | | — | | | (88) |
Deferred income tax valuation allowance (release) charges | | | — | | | (26) | | | — | | | 26 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Changes in fair value of securities used to hedge guaranteed living benefits | | | (56) | | | (12) | | | — | | | (44) | | | (44) | | | (9) | | | — | | | (35) | | | (194) | | | (41) | | | — | | | (153) |
Changes in benefit reserves and DAC, VOBA and DSI related to net realized (gains) losses | | | 101 | | | 21 | | | — | | | 80 | | | (60) | | | (13) | | | — | | | (47) | | | (34) | | | (7) | | | — | | | (27) |
Loss on extinguishment of debt | | | 219 | | | 46 | | | — | | | 173 | | | 10 | | | 2 | | | — | | | 8 | | | 32 | | | 7 | | | — | | | 25 |
Net realized (gains) losses(a) | | | (813) | | | (171) | | | 68 | | | (574) | | | 895 | | | 190 | | | 30 | | | 735 | | | 529 | | | 111 | | | 27 | | | 445 |
Non-operating litigation reserves and settlements | | | — | | | — | | | — | | | — | | | (12) | | | (3) | | | — | | | (9) | | | 4 | | | 1 | | | — | | | 3 |
Integration and transaction costs associated with acquiring or divesting businesses | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 3 | | | 1 | | | — | | | 2 |
Restructuring and other costs | | | 44 | | | 9 | | | — | | | 35 | | | 63 | | | 13 | | | — | | | 50 | | | 21 | | | 4 | | | — | | | 17 |
Non-recurring costs related to regulatory or accounting changes | | | 31 | | | 7 | | | — | | | 24 | | | 45 | | | 10 | | | — | | | 35 | | | 7 | | | 1 | | | — | | | 6 |
Net (gain) loss on divestiture | | | (3,081) | | | (710) | | | — | | | (2,371) | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Pension expense - non operating | | | 12 | | | 3 | | | — | | | 9 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Noncontrolling interests (b) | | | (861) | | | — | | | 861 | | | — | | | (194) | | | — | | | 194 | | | — | | | (230) | | | — | | | 230 | | | — |
Subtotal - Other non-Fortitude Re reconciling items | | | (4,404) | | | (659) | | | 929 | | | (2,816) | | | 703 | | | 309 | | | 224 | | | 618 | | | 138 | | | 165 | | | 257 | | | 230 |
Total adjustments | | | (6,442) | | | (1,087) | | | 929 | | | (4,426) | | | 2,343 | | | 653 | | | 224 | | | 1,914 | | | 3,445 | | | 860 | | | 257 | | | 2,842 |
Adjusted pre-tax operating income (loss)/Adjusted after-tax operating income (loss) | | | $3,685 | | | $756 | | | $— | | | $2,929 | | | $3,194 | | | $638 | | | $— | | | $2,556 | | | $3,584 | | | $692 | | | $— | | | $2,892 |
(a) | Includes all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Additionally, gains (losses) related to the disposition of real estate investments are also excluded from this adjustment. |
(b) | The presentation of adjustments for 2020 and 2019 for noncontrolling interests has been revised from $(153) million to $(194) million and from $(182) million to $(230) million in 2020 and 2019, respectively; and to remove the total tax (benefit) charge from noncontrolling interests of $(41) million and $(48) million for 2020 and 2019, respectively. These revisions have no impact on Corebridge's consolidated financial statements and are not considered material to the previously issued financial statements. |
Years Ended December 31, | | | GAAP | | | Non-GAAP Adjustments | | | Adjusted | |||||||||||||||
(in millions) | | | Pre-tax Income | | | Tax | | | Rate | | | Pre-tax Adjustments | | | Tax | | | APTOI | | | Tax | | | Rate |
2021 | | | | | | | | | | | | | | | | | ||||||||
U.S. federal income tax at statutory | | | $10,127 | | | $2,127 | | | $21.0% | | | $(6,442) | | | $(1,353) | | | $3,685 | | | $774 | | | $21.0% |
Rate Adjustments: | | | | | | | | | | | | | | | | | ||||||||
Uncertain Tax Positions | | | — | | | (69) | | | (0.7) | | | — | | | 66 | | | — | | | (3) | | | (0.1) |
Reclassifications from accumulated other comprehensive income | | | — | | | (108) | | | (1.1) | | | — | | | 108 | | | — | | | — | | | — |
Non-controlling Interest(a) | | | — | | | (197) | | | (1.9) | | | — | | | 181 | | | — | | | (16) | | | (0.4) |
Dividends received deduction | | | — | | | (37) | | | (0.4) | | | — | | | — | | | — | | | (37) | | | (1.0) |
State and local income taxes | | | — | | | 105 | | | 1.0 | | | — | | | (55) | | | — | | | 50 | | | 1.4 |
Other | | | — | | | (5) | | | — | | | — | | | (12) | | | — | | | (17) | | | (0.5) |
Adjustments to prior year tax returns | | | — | | | (3) | | | — | | | — | | | 4 | | | — | | | 1 | | | — |
Share based compensation payments excess tax deduction | | | — | | | 4 | | | — | | | — | | | — | | | — | | | 4 | | | 0.1 |
Valuation allowance: | | | | | | | | | | | | | | | | | ||||||||
Continuing operations | | | — | | | 26 | | | 0.3 | | | — | | | (26) | | | — | | | — | | | — |
Amount Attributable to Corebridge | | | $10,127 | | | $1,843 | | | 18.2% | | | $(6,442) | | | $(1,087) | | | $3,685 | | | $756 | | | 20.5% |
2020 | | | | | | | | | | | | | | | | | ||||||||
U.S. federal income tax at statutory | | | $851 | | | $178 | | | 21.0% | | | $2,343 | | | $493 | | | $3,194 | | | $671 | | | 21.0% |
Rate Adjustments: | | | | | | | | | | | | | | | | | ||||||||
Uncertain Tax Positions | | | — | | | 17 | | | 2.0 | | | — | | | 4 | | | — | | | 21 | | | 0.7 |
Reclassifications from accumulated other comprehensive income | | | — | | | (100) | | | (11.8) | | | — | | | 100 | | | — | | | — | | | — |
Non-controlling Interest(a) | | | — | | | (47) | | | (5.5) | | | — | | | 41 | | | — | | | (6) | | | (0.2) |
Dividends received deduction | | | — | | | (39) | | | (4.6) | | | — | | | — | | | — | | | (39) | | | (1.2) |
State and local income taxes | | | — | | | (4) | | | (0.5) | | | — | | | — | | | — | | | (4) | | | (0.1) |
Other | | | — | | | 1 | | | 0.1 | | | — | | | (3) | | | — | | | (2) | | | (0.1) |
Adjustments to prior year tax returns | | | — | | | (27) | | | (3.2) | | | — | | | 14 | | | — | | | (13) | | | (0.4) |
Share based compensation payments excess tax deduction | | | — | | | 10 | | | 1.2 | | | — | | | — | | | — | | | 10 | | | 0.3 |
Valuation allowance: | | | | | | | | | | | | | | | | | ||||||||
Continuing operations | | | — | | | (4) | | | (0.5) | | | — | | | 4 | | | — | | | — | | | — |
Amount Attributable to Corebridge | | | $851 | | | $(15) | | | (1.8)% | | | $2,343 | | | $653 | | | $3,194 | | | $638 | | | 20.0% |
2019 | | | | | | | | | | | | | | | | | ||||||||
U.S. federal income tax at statutory | | | $139 | | | $29 | | | 21.0% | | | $3,445 | | | $724 | | | $3,584 | | | $753 | | | 21.0% |
Rate Adjustments: | | | | | | | | | | | | | | | | | ||||||||
Uncertain Tax Positions | | | — | | | 35 | | | 25.2 | | | — | | | (29) | | | — | | | 6 | | | 0.2 |
Reclassifications from accumulated other comprehensive income | | | — | | | (114) | | | (82.0) | | | — | | | 114 | | | — | | | — | | | — |
Non-controlling Interest(a) | | | — | | | (52) | | | (37.4) | | | — | | | 48 | | | — | | | (4) | | | (0.1) |
Dividends received deduction | | | — | | | (40) | | | (28.8) | | | — | | | — | | | — | | | (40) | | | (1.1) |
State and local income taxes | | | — | | | 14 | | | 10.0 | | | — | | | — | | | — | | | 14 | | | 0.4 |
Other | | | — | | | 5 | | | 3.6 | | | — | | | — | | | — | | | 5 | | | 0.1 |
Adjustments to prior year tax returns | | | — | | | (49) | | | (35.3) | | | — | | | — | | | — | | | (49) | | | (1.4) |
Share Based Compensation payments excess tax deduction | | | — | | | 7 | | | 5.0 | | | — | | | — | | | — | | | 7 | | | 0.2 |
Valuation allowance: | | | | | | | | | | | | | | | | | ||||||||
Continuing operations | | | — | | | (3) | | | (2.2) | | | — | | | 3 | | | — | | | — | | | — |
Amount Attributable to Corebridge | | | $139 | | | $(168) | | | (120.9)% | | | $3,445 | | | 860 | | | $3,584 | | | $692 | | | 19.3% |
(a) | The presentation of adjustments for 2020 and 2019 for noncontrolling interests has been revised from $(47) million to $(41) million and from $(52) million to $(48) million for 2020 and 2019, respectively; and to remove the total tax (benefit) charge from noncontrolling interests of $(6) million and $(4) million for 2020 and 2019, respectively. These revisions have no impact on Corebridge's consolidated financial statements and are not considered material to the previously issued financial statements. |
At December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Total Corebridge Shareholders’ equity | | | $27,086 | | | $37,232 | | | $31,805 |
Less: Accumulated other comprehensive income | | | 10,167 | | | 14,653 | | | 9,329 |
Add: Cumulative unrealized gains and losses related to Fortitude Re funds withheld assets | | | 2,629 | | | 4,225 | | | 2,970 |
Adjusted Book Value | | | $19,548 | | | $26,804 | | | $25,446 |
| | December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Net income (loss) attributable to Corebridge shareholders (a) | | | $7,355 | | | $642 | | | $50 |
Adjusted after-tax operating income attributable to Corebridge shareholders (b) | | | $2,929 | | | $2,556 | | | $2,892 |
Average Corebridge Shareholders' equity (c) | | | $32,159 | | | $34,519 | | | $29,098 |
Less: Average AOCI | | | 12,410 | | | 11,991 | | | 5,875 |
Add: Average cumulative unrealized gains and losses related to Fortitude Re funds withheld assets | | | 3,427 | | | 3,598 | | | 1,771 |
Average Adjusted Book Value (d) | | | $23,176 | | | $26,125 | | | $24,994 |
Return on Average Equity (a / c) | | | 22.9% | | | 1.9% | | | 0.2% |
Adjusted ROAE (b / d) | | | 12.6% | | | 9.8% | | | 11.6% |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Individual Retirement | | | | | | | |||
Premiums | | | $191 | | | $151 | | | $104 |
Deposits(b) | | | 13,473 | | | 9,492 | | | 13,530 |
Other(a) | | | (7) | | | (9) | | | (9) |
Premiums and deposits | | | 13,657 | | | 9,634 | | | 13,625 |
Group Retirement | | | | | | | |||
Premiums | | | 22 | | | 19 | | | 16 |
Deposits | | | 7,744 | | | 7,477 | | | 8,330 |
Premiums and deposits(c)(d) | | | 7,766 | | | 7,496 | | | 8,346 |
Life Insurance | | | | | | | |||
Premiums | | | 1,573 | | | 1,526 | | | 1,438 |
Deposits | | | 1,635 | | | 1,648 | | | 1,667 |
Other(a) | | | 1,020 | | | 873 | | | 827 |
Premiums and deposits | | | 4,228 | | | 4,047 | | | 3,932 |
Institutional Markets | | | | | | | |||
Premiums | | | 3,774 | | | 2,564 | | | 1,877 |
Deposits | | | 1,158 | | | 2,284 | | | 931 |
Other(a) | | | 25 | | | 25 | | | 27 |
Premiums and deposits | | | 4,957 | | | 4,873 | | | 2,835 |
Total | | | | | | | |||
Premiums | | | 5,560 | | | 4,260 | | | 3,435 |
Deposits | | | 24,010 | | | 20,901 | | | 24,458 |
Other(a) | | | 1,038 | | | 889 | | | 845 |
Premiums and deposits | | | $30,608 | | | $26,050 | | | $28,738 |
(a) | Other principally consists of ceded premiums, in order to reflect gross premiums and deposits. |
(b) | Excludes deposits from the assets of our retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale. Deposits from these retail mutual funds were $259 million, $736 million and $1.3 billion for years ended December 31, 2021, 2020 and 2019, respectively. |
(c) | Excludes client deposits into advisory and brokerage accounts of $2.5 billion, $1.4 billion and $1.2 billion for years ended December 31, 2021, 2020 and 2019, respectively. |
(d) | Includes $3.1 billion, $3.0 billion and $2.9 billion of inflows related to in-plan mutual funds for years ended December 31, 2021, 2020 and 2019, respectively. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Subsidiary dividends paid | | | $1,564 | | | $540 | | | $ 1,535 |
Less: Non-recurring dividends | | | (295) | | | 600 | | | (400) |
Tax sharing payments related to utilization of tax attributes | | | 902 | | | 1,026 | | | 954 |
Normalized distributions | | | $2,171 | | | $2,166 | | | $2,089 |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ millions) | |||||||
Liability for ULSG and similar features | | | $4,505 | | | $4,751 | | | $3,794 |
Deferred Acquisition Costs | | | (2,822) | | | (2,708) | | | (2,417) |
Unearned Revenue Reserves | | | 1,848 | | | 1,660 | | | 1,431 |
Impact of Unrealized Capital Gains (Losses) from Investments | | | (1,135) | | | (1,495) | | | (1,099) |
Other Guaranteed Benefits | | | 419 | | | 421 | | | 527 |
Other Ceded Guaranteed Benefits | | | (256) | | | (266) | | | (294) |
ULSG Net Liability | | | $2,559 | | | $2,363 | | | $1,942 |
($ billions) | | | For the year ended December 31, 2021 |
Future policy benefits for life and accident and health contracts | | | $57.8 |
Policyholder contract deposits | | | 156.8 |
Other policyholder funds | | | 2.9 |
Separate account liabilities | | | 109.1 |
Less: Direct liabilities related to the Corporate and Other segment and other balances (a) | | | (29.7) |
Less: Reinsurance assets (b) | | | (2.0) |
Net insurance liabilities | | | $294.9 |
(a) | Other balances primarily includes unearned revenue reserves which are recorded in other policyholder funds. |
(b) | Reinsurance assets includes recoverables related to future policy benefits and policyholder contract deposits. Recoverables related to paid claims are excluded. |
At December 31, (in billions) | | | 2021 | | | 2020 | | | 2019 |
Individual Retirement | | | | | | | |||
AUM | | | $160.2 | | | $157.3 | | | $145.3 |
AUA(a) | | | — | | | — | | | — |
Total Individual Retirement AUMA | | | 160.2 | | | 157.3 | | | 145.3 |
Group Retirement | | | | | | | |||
AUM | | | 97.2 | | | 94.5 | | | 87.3 |
AUA | | | 42.6 | | | 35.6 | | | 30.9 |
Total Group Retirement AUMA | | | 139.8 | | | 130.1 | | | 118.2 |
Life Insurance | | | | | | | |||
AUM | | | 34.4 | | | 34.8 | | | 32.0 |
AUA | | | — | | | — | | | — |
Total Life Insurance AUMA | | | 34.4 | | | 34.8 | | | 32.0 |
Institutional Markets | | | | | | | |||
AUM | | | 32.7 | | | 30.4 | | | 26.6 |
AUA | | | 43.8 | | | 43.3 | | | 39.9 |
Total Institutional Markets AUMA | | | 76.5 | | | 73.7 | | | 66.5 |
Total AUMA | | | $410.9 | | | $395.9 | | | $362.0 |
(a) | Excludes AUA from the assets of our retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale. AUA related to these retail mutual funds were $7.8 billion, and $12.0 billion as of December 31, 2020 and 2019, respectively. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Individual Retirement | | | | | | | |||
Fee Income(a) | | | $1,500 | | | $1,321 | | | $1,254 |
Spread Income | | | 2,650 | | | 2,430 | | | 2,500 |
Total Individual Retirement(a) | | | 4,150 | | | 3,751 | | | 3,754 |
Group Retirement | | | | | | | |||
Fee Income | | | 859 | | | 715 | | | 690 |
Spread Income | | | 1,275 | | | 1,088 | | | 1,133 |
Total Group Retirement | | | 2,134 | | | 1,803 | | | 1,823 |
Life Insurance | | | | | | | |||
Underwriting margin | | | 1,067 | | | 1,261 | | | 1,473 |
Total Life Insurance | | | 1,067 | | | 1,261 | | | 1,473 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Institutional Markets(b) | | | | | | | |||
Fee Income | | | 61 | | | 62 | | | 68 |
Spread Income | | | 478 | | | 290 | | | 251 |
Underwriting margin | | | 102 | | | 75 | | | 75 |
Total Institutional Markets | | | 641 | | | 427 | | | 394 |
Total | | | | | | | |||
Fee Income | | | 2,420 | | | 2,098 | | | 2,012 |
Spread Income | | | 4,403 | | | 3,808 | | | 3,884 |
Underwriting margin | | | 1,169 | | | 1,336 | | | 1,548 |
Total | | | $7,992 | | | $7,242 | | | $7,444 |
(a) | Excludes fee income of $54 million, $111 million and $163 million for the years ended December 31, 2021, 2020 and 2019, respectively related to the assets of our Retail Mutual Funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale. |
(b) | Fee income for Institutional Markets includes only SVW fee income, while underwriting margin includes fee and advisory income on products other than SVW. |
(in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Individual Retirement | | | | | | | |||
Fixed Annuities | | | $(2,396) | | | $(2,504) | | | $(711) |
Fixed Index Annuities | | | 4,072 | | | 2,991 | | | 4,657 |
Variable Annuities | | | (864) | | | (1,554) | | | (1,973) |
Subtotal - Individual Retirement | | | 812 | | | (1,067) | | | 1,973 |
Group Retirement | | | (3,208) | | | (1,940) | | | (2,646) |
Total Net Flows(a) | | | $(2,396) | | | $(3,007) | | | $(673) |
(a) | Excludes net flows of ($1.4 billion), ($3.7 billion) and ($3.4 billion) for the years ended December 31, 2021, 2020 and 2019, respectively, related to the assets of our Retail Mutual Funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated in connection with the sale. |
(dollars in millions, except per common share data) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Revenues: | | | | | | | |||
Premiums | | | $5,637 | | | $4,341 | | | $3,501 |
Policy fees | | | 3,051 | | | 2,874 | | | 2,930 |
Net investment income | | | 11,672 | | | 10,516 | | | 10,774 |
Net realized gains (losses) | | | 1,855 | | | (3,741) | | | (5,064) |
(dollars in millions, except per common share data) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Advisory fee and other income | | | 1,175 | | | 1,072 | | | 1,069 |
Total revenues | | | 23,390 | | | 15,062 | | | 13,210 |
Benefits and expenses: | | | | | | | |||
Policyholder benefits | | | 8,050 | | | 6,602 | | | 5,335 |
Interest credited to policyholder account balances | | | 3,549 | | | 3,528 | | | 3,614 |
Amortization of deferred policy acquisition costs and value of business acquired | | | 1,057 | | | 543 | | | 674 |
Non-deferrable insurance commissions | | | 680 | | | 604 | | | 564 |
Advisory fee expenses | | | 322 | | | 316 | | | 322 |
General operating expenses | | | 2,104 | | | 2,027 | | | 1,975 |
Interest expense | | | 389 | | | 490 | | | 555 |
Loss on extinguishment of debt | | | 219 | | | 10 | | | 32 |
Net (gain) loss on divestitures | | | (3,081) | | | — | | | — |
Net (gains) losses on Fortitude Re transactions | | | (26) | | | 91 | | | — |
Total benefits and expenses | | | 13,263 | | | 14,211 | | | 13,071 |
Income before income tax expense (benefit) | | | 10,127 | | | 851 | | | 139 |
Income tax expense (benefit) | | | 1,843 | | | (15) | | | (168) |
Net income | | | 8,284 | | | 866 | | | 307 |
Less: Net income attributable to noncontrolling interests | | | 929 | | | 224 | | | 257 |
Net income attributable to Corebridge | | | $7,355 | | | $642 | | | $50 |
Income (loss) per common share attributable to Corebridge common shareholders: | | | | | | | |||
Class A - Basic and diluted | | | $76,127 | | | $6,420 | | | $500 |
Class B - Basic and diluted | | | $50,101 | | | $6,420 | | | $500 |
Weighted average shares outstanding: | | | | | | | |||
Class A - Basic and diluted | | | 90,100 | | | 90,100 | | | 90,100 |
Class B - Basic and diluted | | | 9,900 | | | 9,900 | | | 9,900 |
• | higher realized gains of $5.6 billion primarily driven by a lower decrease in the fair value of our embedded derivatives related to the Fortitude Re funds withheld assets and higher realized gains on sales of real estate investments and available for sale securities; |
• | the recognition of a $3.1 billion gain on the closing of the affordable housing sale to Blackstone in 2021 and the sale of certain assets of the Retail Mutual Funds business to Touchstone in 2021; |
• | increase in net investment income of $1.2 billion primarily driven by higher returns on the alternative investment portfolio due to gains on private equity investments; and |
• | higher policy fees of $177 million primarily due to higher average variable annuity separate account assets driven by equity market performance. |
• | higher amortization of DAC of $514 million principally driven by the impact of the review and update of actuarial assumptions and equity market performance; and |
• | higher loss on extinguishment of debt of $209 million primarily due to the extinguishment of debt of certain consolidated investment entities and the partial extinguishment of AIGLH debt. |
• | lower realized losses of $1.3 billion primarily driven by the lower realized loss on the embedded derivative related to the Fortitude Re funds withheld asset; and |
• | lower amortization of DAC of $131 million principally driven by the impact of the review and update of actuarial assumptions and equity market performance. |
• | lower net investment income of $258 million primarily due to lower gains on securities for which the fair value option was elected as well as yield compression driven by lower interest rates; |
• | $240 million unfavorable comparative net impact from life premiums and policy fees net of policyholder benefits (which excludes actuarial assumption updates), driven by higher mortality (which includes COVID-19 impacts); |
• | an additional loss of $91 million related to an amendment on the Fortitude Re reinsurance contract; |
• | higher general operating expenses of $51 million primarily due to an increase in costs related to regulatory and accounting changes; and |
• | higher non-deferrable commission expense of $41 million due to increased sales. |
(in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Pre-tax income attributable to Corebridge | | | $10,127 | | | $851 | | | $139 |
Reconciling items to APTOI: | | | | | | | |||
Fortitude Re related items | | | (2,038) | | | 1,640 | | | 3,307 |
Non-Fortitude Re related items | | | (4,404) | | | 703 | | | 138 |
Adjusted pre-tax operating income | | | $3,685 | | | $3,194 | | | $3,584 |
(in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Premiums | | | $5,646 | | | $4,334 | | | $3,493 |
Policy fees | | | 3,051 | | | 2,874 | | | 2,931 |
Net investment income | | | 9,917 | | | 9,084 | | | 9,021 |
Net realized gains(a) | | | 701 | | | 54 | | | 285 |
Advisory fee and other income | | | 1,175 | | | 1,060 | | | 1,068 |
Total adjusted revenues | | | 20,490 | | | 17,406 | | | 16,798 |
Policyholder benefits | | | 8,028 | | | 6,590 | | | 5,336 |
Interest credited to policyholder account balances | | | 3,569 | | | 3,552 | | | 3,603 |
Amortization of deferred policy acquisition costs | | | $975 | | | $601 | | | $706 |
Non-deferrable insurance commissions | | | 680 | | | 604 | | | 564 |
Advisory fee expenses | | | 322 | | | 316 | | | 322 |
General operating expenses | | | 2,016 | | | 1,920 | | | 1,942 |
Interest expense | | | 354 | | | 435 | | | 511 |
Total benefits and expenses | | | 15,944 | | | 14,018 | | | 12,984 |
Noncontrolling interests | | | (861) | | | (194) | | | (230) |
Adjusted pre-tax operating income | | | $3,685 | | | $3,194 | | | $3,584 |
(a) | Net realized gains (losses) includes the gains (losses) related to the disposition of real estate investments. |
• | higher net investment income of $833 million primarily driven by higher private equity income and higher gains on call and tender activity; and |
• | higher policy fees, advisory fee and other income of $292 million primarily driven by higher average separate account assets. |
• | higher DAC amortization of $374 million principally impacted by the review and update of actuarial assumptions and equity market performance; and |
• | higher non-deferrable insurance commissions of $76 million primarily driven by growth in variable annuity separate account assets and higher advisory fee expenses driven by increased sales. |
• | an increase in policyholder benefits of $1.3 billion primarily driven by $712 million from new Institutional Markets business, including changes from new PRT transactions; and |
• | higher net unfavorable impacts from higher mortality driven by COVID-19 and the review and update of actuarial assumptions compared to prior year of $113 million. |
• | an increase in premiums of $841 million primarily driven by $687 million from new Institutional Markets business, including new PRT transactions; and |
• | lower DAC amortization of $102 million principally impacted by the review and update of actuarial assumptions and equity market performance. |
• | Individual Retirement – consists of fixed annuities, fixed index annuities, variable annuities and retail mutual funds. On February 8, 2021, we announced the execution of a definitive agreement with Touchstone to sell certain assets of our Retail Mutual Funds business. This Touchstone transaction closed on July 16, 2021. For further information on this sale see Note 1. |
• | Group Retirement – consists of record-keeping, plan administrative and compliance services, financial planning and advisory solutions offered to employer defined contribution plans and their participants, along with proprietary and non-proprietary annuities, advisory and brokerage products offered outside of plan. |
• | Life Insurance – primary products in the United States include term life and universal life insurance. The International business issues individual life, whole life and group life insurance in the United Kingdom, and distributes medical insurance in Ireland. |
• | Institutional Markets – consists of SVW products, structured settlement and PRT annuities, corporate- and bank-owned life insurance, high net worth products and GICs. |
• | Corporate and Other – consists primarily of: |
– | Corporate expenses not attributable to our other segments; |
– | Interest expense on financial debt; |
– | Results of our consolidated investment entities; |
– | Institutional asset management business, which includes managing assets for non-consolidated affiliates; and |
– | Results of our legacy insurance lines ceded to Fortitude Re. |
(in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Individual Retirement | | | $1,895 | | | $1,942 | | | $2,010 |
Group Retirement | | | 1,273 | | | 975 | | | 958 |
Life Insurance | | | 96 | | | 146 | | | 522 |
Institutional Markets | | | 584 | | | 367 | | | 322 |
Corporate and Other | | | (161) | | | (234) | | | (227) |
Consolidation and elimination | | | (2) | | | (2) | | | (1) |
Adjusted pre-tax operating income | | | $3,685 | | | $3,194 | | | $3,584 |
(in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Revenues: | | | | | | | |||
Premiums | | | $191 | | | $151 | | | $104 |
Policy fees | | | 962 | | | 861 | | | 811 |
Net investment income | | | 4,334 | | | 4,105 | | | 4,163 |
Advisory fee and other income* | | | 592 | | | 571 | | | 606 |
Total adjusted revenues | | | 6,079 | | | 5,688 | | | 5,684 |
Benefits and expenses: | | | | | | | |||
Policyholder benefits | | | 580 | | | 411 | | | 391 |
Interest credited to policyholder account balances | | | 1,791 | | | 1,751 | | | 1,726 |
Amortization of deferred policy acquisition costs | | | 744 | | | 556 | | | 480 |
Non-deferrable insurance commissions | | | 397 | | | 334 | | | 318 |
Advisory fee expenses | | | 189 | | | 205 | | | 219 |
General operating expenses | | | 437 | | | 427 | | | 468 |
Interest expense | | | 46 | | | 62 | | | 72 |
Total benefits and expenses | | | 4,184 | | | 3,746 | | | 3,674 |
Adjusted pre-tax operating income | | | $1,895 | | | $1,942 | | | $2,010 |
* | Includes advisory fee income from registered investment services, 12b-1 fees (i.e., marketing and distribution fee income), and other asset management fee income. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Fee income(a) | | | $1,500 | | | $1,321 | | | $1,254 |
Spread income(b) | | | 2,650 | | | 2,430 | | | 2,500 |
Policyholder benefits, net of premiums | | | (389) | | | (260) | | | (287) |
Non-deferrable insurance commissions | | | (397) | | | (334) | | | (318) |
Amortization of DAC and SIA | | | (851) | | | (632) | | | (543) |
General operating expenses | | | (437) | | | (427) | | | (468) |
Other(c) | | | (181) | | | (156) | | | (128) |
Adjusted pre-tax operating income | | | $1,895 | | | $1,942 | | | $2,010 |
(a) | Fee income represents policy fees plus advisory fee and other income. Fee income excludes fee income of $54 million, $111 million, and $163 million for the year ended December 31, 2021, 2020 and 2019, respectively, related to assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale. |
(b) | Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortization of sales inducements of $107 million, $76 million, $63 million. |
(c) | Other represents advisory fee expenses, interest expense and fee income related to assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale. |
• | unfavorable impact from the review and update of actuarial assumptions of $320 million compared to $94 million unfavorable in the prior year; |
• | increase in DAC amortization and policyholder benefits net of premiums, excluding the actuarial assumptions updates of $130 million primarily due to higher growth in Index Annuities, coupled with the impact of lower portfolio yields on policyholder benefits; and |
• | an increase in non-deferrable insurance commissions of $63 million primarily due to growth in variable annuity separate account assets. |
• | higher net investment income of $229 million primarily driven by higher private equity income of $257 million, higher commercial mortgage loan prepayment income, and higher call and tender income; and |
• | higher policy and advisory fee income, net of advisory fee expenses of $138 million, primarily due to an increase in variable annuity separate account assets driven by robust equity market performance. |
• | net investment income was lower by $58 million primarily due to lower gains on securities for which the fair-value option was elected, and lower base portfolio income primarily driven by lower interest rates resulting in spread compression, partially offset by higher call and tender income from invested assets and higher alternative income due to private equity returns; |
• | excluding the net impact from our annual review and update of actuarial assumptions, DAC amortization and policyholder benefits net of premiums was $56 million higher due to lower variable annuity separate account returns, and fixed index annuities growth; and |
• | unfavorable impact from the review and update of actuarial assumptions of $94 million compared to $63 million unfavorable in the prior year. |
• | $41 million of lower general operating expenses primarily due to lower travel as a result of COVID-19 and other employee related expenses; and |
• | $29 million of higher policy fees and advisory fee and other income, net of advisory fee expenses, driven by higher fees from fixed index and fixed annuity products with guaranteed living benefits. |
(in billions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Fixed annuities | | | $57.8 | | | $60.5 | | | $60.4 |
Fixed index annuities | | | 31.8 | | | 27.9 | | | 22.1 |
Variable annuities | | | 70.6 | | | 68.9 | | | 62.8 |
Total* | | | $160.2 | | | $157.3 | | | $145.3 |
* | Excludes assets of the Retail Mutual Funds business that were sold to Touchstone on July 16, 2021, or were otherwise liquidated, in connection with the sale. AUA related to these retail mutual funds were $7.8 billion, and $12 billion as of December 31, 2020 and 2019, respectively. |
(in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Fee income: | | | | | | | |||
Fixed annuities | | | $44 | | | $37 | | | $24 |
Fixed index annuities | | | 140 | | | 118 | | | 75 |
Variable annuities(a)(b) | | | 1,316 | | | 1,166 | | | 1,155 |
Total fee income | | | 1,500 | | | 1,321 | | | 1,254 |
Policy fees | | | 962 | | | 861 | | | 811 |
Advisory fees and other income(b) | | | 538 | | | 460 | | | 443 |
Total fee income | | | $1,500 | | | $1,321 | | | $1,254 |
Spread income: | | | | | | | |||
Fixed annuities | | | 1,309 | | | 1,276 | | | 1,375 |
Fixed index annuities | | | 843 | | | 725 | | | 668 |
Variable annuities | | | 498 | | | 429 | | | 457 |
Total spread income | | | $2,650 | | | $2,430 | | | $2,500 |
Net investment income | | | 4,334 | | | 4,105 | | | 4,163 |
Interest credited to policyholder account balances | | | (1,684) | | | (1,675) | | | (1,663) |
Total spread income(c) | | | $2,650 | | | $2,430 | | | $2,500 |
(a) | Includes SAAMCo related fee income of $193 million, $165 million, and $159 million for the year ended December 31, 2021, 2020 and 2019, respectively. Includes SAAMCo related spread income of $3 million for the year ended December 31, 2019. |
(b) | Excludes fee income of $54 million, $111 million, and $163 million for the year ended December 31, 2021, 2020 and 2019, respectively, related to assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale. |
(c) | Excludes amortization of sales inducement assets of $107 million, $76 million, and $63 million for the year ended December 31, 2021, 2020 and 2019, respectively. |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Fixed annuities base net investment spread: | | | | | | | |||
Base yield(a) | | | 3.94% | | | 4.16% | | | 4.54% |
Cost of funds | | | 2.58 | | | 2.63 | | | 2.68 |
Fixed annuities base net investment spread | | | 1.36 | | | 1.53 | | | 1.86 |
Fixed index annuities base net investment spread: | | | | | | | |||
Base yield(a) | | | 3.78 | | | 3.97 | | | 4.46 |
Cost of funds | | | 1.30 | | | 1.28 | | | 1.26 |
Fixed index annuities base net investment spread | | | 2.48 | | | 2.69 | | | 3.20 |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Variable annuities base net investment spread: | | | | | | | |||
Base yield(a) | | | 3.96 | | | 3.86 | | | 4.32 |
Cost of funds | | | 1.42 | | | 1.42 | | | 1.63 |
Variable annuities base net investment spread | | | 2.54 | | | 2.44 | | | 2.69 |
Total Individual Retirement base net investment spread: | | | | | | | |||
Base yield(a) | | | 3.89 | | | 4.07 | | | 4.50 |
Cost of funds | | | 2.08 | | | 2.15 | | | 2.25 |
Total Individual Retirement base net investment spread: | | | 1.81% | | | 1.92% | | | 2.25% |
(a) | Includes returns from base portfolio including accretion and income (loss) from certain other invested assets. |
• | Fee income increased $179 million, primarily due to an increase in mortality and expense (“M&E”) fees of $95 million and other fee income of $78 million due to higher variable annuity separate account assets driven by robust equity market performance. |
• | Spread income increased $220 million driven by higher private equity income of $257 million, higher commercial mortgage loan prepayment income, and higher call and tender income, partially offset by lower base portfolio income driven by low interest rates resulting in spread compression. |
• | Fee income increased $67 million driven by higher fees from products with guaranteed living benefits of $35 million, mostly from fixed index and fixed annuity products and an increase in M&E fees of $12 million and other fee income of $17 million due to higher variable annuity separate account assets driven by equity market growth. |
• | Spread income decreased $70 million primarily due to lower net investment income of $58 million primarily due to lower gains on securities for which the fair-value option was elected, and lower base portfolio income primarily driven by lower interest rates resulting in spread compression, partially offset by higher call and tender income from invested assets and higher alternative income due to private equity returns. |
Premiums and Deposits (in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Fixed annuities | | | $3,011 | | | $2,535 | | | $5,280 |
Fixed index annuities | | | 5,621 | | | 4,096 | | | 5,466 |
Variable annuities | | | 5,025 | | | 3,003 | | | 2,879 |
Total(a) | | | $13,657 | | | $9,634 | | | $13,625 |
(a) | Excludes assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale. Deposits from retail mutual funds were $259 million, $736 million, and $1.3 billion for years ended December 31, 2021, 2020 and 2019, respectively. |
Net Flows (in millions) | | | Years Ended December 31, | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Fixed annuities | | | $(2,396) | | | $(2,504) | | | $(711) |
Fixed index annuities | | | 4,072 | | | 2,991 | | | 4,657 |
Variable annuities | | | (864) | | | (1,554) | | | (1,973) |
Total(a) | | | $812 | | | $(1,067) | | | $1,973 |
(a) | Excludes net flows related to the assets of the retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated, in connection with the sale. Net flows from retail mutual funds were ($1.4 billion), ($3.7 billion), and ($3.4 billion) for the years ended December 31, 2021, 2020 and 2019, respectively. Net flows for retail mutual funds represent deposits less withdrawals. |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Fixed annuities | | | 7.2% | | | 5.9% | | | 7.2% |
Fixed index annuities | | | 4.6 | | | 4.0 | | | 3.8 |
Variable annuities | | | 7.3 | | | 6.2 | | | 7.2 |
At December 31, (in millions) | | | 2021 | | | 2020 | ||||||||||||
| Fixed Annuities | | | Fixed Index Annuities | | | Variable Annuities | | | Fixed Annuities | | | Fixed Index Annuities | | | Variable Annuities | ||
No surrender charge | | | $26,419 | | | $2,009 | | | $34,030 | | | $27,103 | | | $1,423 | | | $29,594 |
Greater than 0% – 2% | | | 2,091 | | | 1,681 | | | 10,925 | | | 2,297 | | | 1,129 | | | 10,542 |
Greater than 2% – 4% | | | 2,424 | | | 4,195 | | | 9,884 | | | 2,757 | | | 3,427 | | | 11,966 |
Greater than 4% | | | 16,443 | | | 22,489 | | | 13,219 | | | 16,159 | | | 19,685 | | | 12,647 |
Non-surrenderable | | | 2,373 | | | — | | | — | | | 2,214 | | | — | | | — |
Total reserves | | | $49,750 | | | $30,374 | | | $68,058 | | | $50,530 | | | $25,664 | | | $64,749 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Revenues: | | | | | | | |||
Premiums | | | $22 | | | $19 | | | $16 |
Policy fees | | | 522 | | | 443 | | | 429 |
Net investment income | | | 2,413 | | | 2,213 | | | 2,262 |
Advisory fee and other income(a) | | | 337 | | | 272 | | | 261 |
Total adjusted revenues | | | 3,294 | | | 2,947 | | | 2,968 |
Benefits and expenses: | | | | | | | |||
Policyholder benefits | | | 76 | | | 74 | | | 63 |
Interest credited to policyholder account balances | | | 1,150 | | | 1,125 | | | 1,147 |
Amortization of deferred policy acquisition costs | | | 61 | | | 15 | | | 81 |
Non-deferrable insurance commissions | | | 121 | | | 117 | | | 113 |
Advisory fee expenses | | | 133 | | | 111 | | | 103 |
General operating expenses | | | 445 | | | 488 | | | 459 |
Interest expense | | | 35 | | | 42 | | | 44 |
Total benefits and expenses | | | 2,021 | | | 1,972 | | | 2,010 |
Adjusted pre-tax operating income | | | $1,273 | | | $975 | | | $958 |
(a) | Includes advisory fee income from registered investment services, 12b-1 fees (i.e., marketing and distribution fee income), and other asset management fee income, and commission-based broker-dealer services. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Fee income(a) | | | $859 | | | 715 | | | $690 |
Spread income(b) | | | 1,275 | | | 1,088 | | | 1,133 |
Policyholder benefits, net of premiums | | | (54) | | | (55) | | | (47) |
Non-deferrable insurance commissions | | | (121) | | | (117) | | | (113) |
Amortization of DAC and SIA | | | (73) | | | (15) | | | (99) |
General operating expenses | | | (445) | | | (488) | | | (459) |
Other(c) | | | (168) | | | (153) | | | (147) |
Adjusted pre-tax operating income | | | $1,273 | | | $975 | | | $958 |
(a) | Fee income represents policy fee and advisory fee and other income. |
(b) | Spread income represents net investment income less interest credited to policyholder account balances, exclusive of amortziation of sales inducments of $12 million, $0 million and $18 million. |
(c) | Other consists of advisory fee expenses and interest expense. |
• | net investment income, net of interest credited was $175 million higher primarily driven by higher gains on private equity income and higher call and tender income, partially offset by lower base portfolio income net of interest credited driven by decreased reinvestment yields; |
• | $122 million of higher policy and advisory fee income, net of advisory fee expenses due to an increase in separate account, mutual fund, and advisory average assets; and |
• | lower general operating expenses of $43 million primarily due to decreased regulatory expenses. |
• | unfavorable impact from the review and update of actuarial assumptions of $5 million in 2021 compared to $68 million favorable in prior year. |
• | favorable impact from the review and update of actuarial assumptions of $68 million in 2020 compared to $17 million unfavorable in prior year; and |
• | $17 million of higher policy fees and advisory fee and other income, net of advisory fee expenses due to an increase in separate account and mutual fund average assets. |
• | higher general operating expenses of $29 million primarily due to increased regulatory expenses, partially offset by lower travel (as a result of COVID-19) and other employee related expenses; |
• | increases in variable annuity DAC amortization and reserves excluding the actuarial assumption of $19 million due to lower equity market performance compared to the prior year; and |
• | net investment income, net of interest credited was $49 million lower due principally lower reinvestment yields partially offset by higher average invested assets and lower interest credited, as well as higher gains on private equity income as well as prepayment income on invested assets. |
| | For the years ended December 31 | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | $ | | | $ | | | $ | |
| | ($ in billions) | |||||||
AUMA by asset type | | | | | | | |||
In-plan spread based | | | $32.5 | | | $33.4 | | | $31.4 |
In-plan fee based | | | 60.3 | | | 53.9 | | | 48.1 |
Total in-plan AUMA(1) | | | $92.8 | | | $87.3 | | | $79.5 |
Out-of-plan proprietary fixed annuity and fixed index annuities | | | 9.6 | | | 9.3 | | | 8.4 |
Out-of-plan proprietary variable annuities | | | 23.6 | | | 22.9 | | | 21.1 |
Total out-of-plan proprietary annuities(2) | | | 33.2 | | | 32.2 | | | 29.5 |
Advisory and brokerage | | | 13.8 | | | 10.6 | | | 9.2 |
Total out-of-plan AUMA | | | $47.0 | | | $42.8 | | | $38.7 |
Total AUMA | | | $139.8 | | | $130.1 | | | $118.2 |
(1) | Includes $15.1 billion, $14.3 billion and $13.5 billion of AUMA for the years ended December 31, 2021, 2020 and 2019, respectively, that is associated with our in-plan investment advisory service that we offer to participants at an additional fee. |
(2) | Includes $4.9 billion, $4.3 billion and $3.8 billion of AUMA for the years ended December 31, 2021, 2020 and 2019, respectively, in our proprietary advisory variable annuity. Together with our out-of-plan advisory and brokerage assets shown in the table above, we had a total of $18.7 billion, $15.0 billion and $13.0 billion of out-of-plan advisory assets for the years ended December 31, 2021, 2020 and 2019, respectively. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Total fee income | | | $859 | | | $715 | | | $690 |
Net investment income | | | $2,413 | | | $2,213 | | | $2,262 |
Interest credited to policyholder account balances | | | (1,138) | | | (1,125) | | | (1,129) |
Total spread income(a) | | | $1,275 | | | $1,088 | | | $1,133 |
(a) | Excludes amortization of sales inducement assets of $12 million, $0 million, and $18 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Base net investment spread: | | | | | | | |||
Base yield(a) | | | 4.11% | | | 4.26% | | | 4.53% |
Cost of funds | | | 2.61 | | | 2.65 | | | 2.72 |
Base net investment spread | | | 1.50% | | | 1.61% | | | 1.81% |
(a) | Includes returns from base portfolio including accretion and income (loss) from certain other invested assets. |
Group Retirement Premiums and Deposits and Net Flows (in millions) | | | Years Ended December 31, | ||||||
| | 2021 | | | 2020 | | | 2019 | |
In-plan(a)(b) | | | $5,911 | | | $5,412 | | | $5,539 |
Out-of-plan proprietary variable annuity | | | 1,288 | | | 1,420 | | | 1,630 |
Out-of-plan proprietary fixed & fixed index annuities | | | 567 | | | 664 | | | 1,177 |
Premiums and deposits(c) | | | 7,766 | | | 7,496 | | | 8,346 |
Net Flows | | | $(3,208) | | | $(1,940) | | | $(2,646) |
(a) | In-plan premium and deposits include sales of variable and fixed annuities as well as mutual funds for 403(b), 401(a), 457(b) and 401(k) plans. |
(b) | Includes $3.1 billion, $3.0 billion and $2.9 billion of inflows related to in-plan mutual funds for years ended December 31, 2021, 2020 and 2019, respectively. |
(c) | Excludes client deposits into advisory and brokerage accounts of $2.5 billion, $1.4 billion and $1.2 billion for the years ending December 31, 2021, 2020 and 2019, respectively. |
• | higher individual surrenders, withdrawals and death benefits driven mainly by higher customer account values of $1.6 billion. |
• | large plan acquisitions and surrenders also contributed to the year over year volatility. In 2021, large group activity contributed net negative flows of $0.1 billion compared to $0.4 billion of net negative flows in the same period in the prior year. |
• | lower individual surrenders, withdrawals and death benefits of $1.2 billion; and |
• | large plan acquisitions and surrenders also contributed to the year over year volatility. In 2020, large group activity contributed net negative flows of $0.4 billion compared to $0.9 billion of net negative flows in the same period in the prior year. |
• | decreased individual deposits of $1.0 billion. |
Years Ended December 31, | | | 2021 | | | 2020 | | | 2019 |
Surrenders as a percentage of average reserves and mutual funds | | | 8.8% | | | 8.6% | | | 10.7% |
At December 31, (in millions) | | | 2021(a) | | | 2020(a) |
No surrender charge(b) | | | $81,132 | | | $77,507 |
Greater than 0% - 2% | | | 716 | | | 565 |
Greater than 2% - 4% | | | 857 | | | 829 |
Greater than 4% | | | 6,197 | | | 6,119 |
Non-surrenderable | | | 810 | | | 616 |
Total reserves | | | $89,712 | | | $85,636 |
(a) | Excludes mutual fund assets under administration of $28.8 billion and $25.0 billion at December 31, 2021 and 2020, respectively. |
(b) | Certain general account reserves in this category are subject to either participant level or plan level withdrawal restrictions, where withdrawals are limited to 20% per year. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Revenues: | | | | | | | |||
Premiums | | | $1,573 | | | $1,526 | | | $1,438 |
Policy fees | | | 1,380 | | | 1,384 | | | 1,503 |
Net investment income | | | 1,621 | | | 1,532 | | | 1,503 |
Other income | | | 110 | | | 94 | | | 86 |
Total adjusted revenues | | | 4,684 | | | 4,536 | | | 4,530 |
Benefits and expenses: | | | | | | | |||
Policyholder benefits | | | 3,231 | | | 3,219 | | | 2,708 |
Interest credited to policyholder account balances | | | 354 | | | 373 | | | 374 |
Amortization of deferred policy acquisition costs | | | 164 | | | 25 | | | 140 |
Non-deferrable insurance commissions | | | 132 | | | 119 | | | 99 |
General operating expenses | | | 682 | | | 624 | | | 657 |
Interest expense | | | 25 | | | 30 | | | 30 |
Total benefits and expenses | | | 4,588 | | | 4,390 | | | 4,008 |
Adjusted pre-tax operating income | | | $96 | | | $146 | | | $522 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Underwriting margin(a) | | | $1,067 | | | $1,261 | | | $1,473 |
General operationg expenses | | | (682) | | | (624) | | | (657) |
Non-deferrable insurance commissions | | | (132) | | | (119) | | | (99) |
Amortization of DAC, excluding impact of annual actuarial assumption update | | | (231) | | | (234) | | | (287) |
Impact of annual actuarial assumption update | | | 99 | | | (108) | | | 122 |
Interest expense | | | (25) | | | (30) | | | (30) |
Adjusted pre-tax operating income | | | $96 | | | $146 | | | $522 |
(a) | Underwriting margin represents premiums, policy fees, net investment income and other income, less policyholder benefits and interest credited to policyholder account balances. Underwriting margin is also exclusive of the impacts from the annual assumption update. |
• | $194 million unfavorable underwriting margin, driven by higher mortality, partially offset by higher net investment income primarily driven by higher gains on calls and alternative investments. |
• | favorable impact from the review and update of actuarial assumptions of $99 million in 2021 compared to $108 million unfavorable in prior year. |
• | unfavorable impact from the review and update of actuarial assumptions of $108 million in 2020 compared to $122 million favorable in the prior year; and |
• | $212 million unfavorable underwriting margin, driven by higher mortality, partially offset by higher net investment income primarily driven by higher gains on calls and alternative investments. |
• | $33 million lower general operating expenses. |
At December 31, (in billions) | | | 2021 | | | 2020 | | | 2019 |
Total AUMA | | | $34.4 | | | $34.8 | | | $32.0 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Premiums | | | $1,573 | | | $1,526 | | | $1,438 |
Policy fees | | | 1,380 | | | 1,384 | | | 1,503 |
Net investment income | | | 1,621 | | | 1,532 | | | 1,503 |
Other income | | | 110 | | | 94 | | | 86 |
Policyholder benefits | | | (3,231) | | | (3,219) | | | (2,708) |
Interest credited to policyholder account balances | | | (354) | | | (373) | | | (374) |
Less: Impact of actuarial assumptions update | | | (32) | | | 317 | | | 25 |
Underwriting margin | | | $1,067 | | | $1,261 | | | $1,473 |
• | $284 million unfavorable comparative net impact from premiums and policy fees net of policyholder benefits (which excludes actuarial assumptions updates), driven by higher mortality. |
• | $89 million of higher net investment income primarily driven by higher gains on calls and alternative investments. |
• | $240 million unfavorable comparative net impact from premiums and policy fees net of policyholder benefits (which excludes actuarial assumptions updates) driven by higher mortality. |
• | $29 million in higher net investment income primarily driven by higher gains on calls and alternative investments. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Traditional Life | | | $1,737 | | | $1,696 | | | $1,683 |
Universal Life | | | 1,635 | | | 1,649 | | | 1,666 |
Other(a) | | | 67 | | | 76 | | | 97 |
Total U.S. | | | 3,439 | | | 3,421 | | | 3,446 |
International | | | 789 | | | 626 | | | 486 |
Premiums and deposits | | | $4,228 | | | $4,047 | | | $3,932 |
(a) | Other includes Accident and Health business as well as Group benefits. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Revenues: | | | | | | | |||
Premiums | | | $3,774 | | | $2,564 | | | $1,877 |
Policy fees | | | 187 | | | 186 | | | 188 |
Net investment income | | | 1,155 | | | 931 | | | 902 |
Other income | | | 2 | | | 1 | | | 1 |
Total adjusted revenues | | | 5,118 | | | 3,682 | | | 2,968 |
Benefits and expenses: | | | | | | | |||
Policyholder benefits | | | 4,141 | | | 2,886 | | | 2,174 |
Interest credited to policyholder account balances | | | 274 | | | 303 | | | 356 |
Amortization of deferred policy acquisition costs | | | 6 | | | 5 | | | 5 |
Non-deferrable insurance commissions | | | 27 | | | 31 | | | 31 |
General operating expenses | | | 77 | | | 79 | | | 69 |
Interest expense | | | 9 | | | 11 | | | 11 |
Total benefits and expenses | | | 4,534 | | | 3,315 | | | 2,646 |
Adjusted pre-tax operating income | | | $584 | | | $367 | | | $322 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Fee income(a) | | | $61 | | | $62 | | | $68 |
Spread income(b) | | | 478 | | | 290 | | | 251 |
Underwriting margin(c) | | | 102 | | | 75 | | | 75 |
Non-deferrable insurance commissions | | | (27) | | | (31) | | | (31) |
General operating expenses | | | (77) | | | (79) | | | (69) |
Other | | | 47 | | | 50 | | | 28 |
Adjusted pre-tax operating income | | | $584 | | | $367 | | | $322 |
(a) | Represents fee income on SVW products. |
(b) | Represents spread income on GIC, PRT and structured settlement products. |
(c) | Represents underwriting margin from Corporate Markets products, including private placement variable universal life insurance and private placement variable annuity products. |
• | $1.2 billion increase in premiums, primarily on PRT, driven by higher sales; |
• | $224 million of higher net investment income primarily due to favorable returns on alternatives, higher call/tender income and higher base portfolio income driven by growth in average invested assets; and |
• | $29 million of lower interested credited to policyholder account balances primarily due to interest rate impacts on certain GICs and hedging instruments as well as fair value changes. |
• | $1.3 billion increase in policyholder benefits (including interest accretion), primarily on PRT, driven by higher sales. |
• | $687 million increase in premiums, primarily on PRT, driven by higher sales; |
• | $53 million of lower interest credited to policyholder account balances primarily due to interest rate impacts on certain GICs and hedging instruments, partially offset by fair value changes; and |
• | $29 million higher net investment income primarily due to higher private equity returns. |
• | $712 million increase in policyholder benefits (including interest accretion), primarily on PRT, driven by higher sales; and |
• | $10 million of higher general operating expenses. |
At December 31, (in billions) | | | 2021 | | | 2020 | | | 2019 |
Total AUMA | | | $76.5 | | | $73.7 | | | $66.5 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
SVW fees | | | $61 | | | $62 | | | $68 |
Total fee income | | | $61 | | | $62 | | | $68 |
Net investment income | | | 969 | | | 777 | | | 750 |
Interest credited to policyholder account balances | | | (166) | | | (195) | | | (250) |
Policyholder benefits | | | (325) | | | (292) | | | (249) |
Total spread income(a) | | | $478 | | | $290 | | | $251 |
Premiums | | | $(35) | | | $(36) | | | $(35) |
Policy fees (excluding SVW) | | | 126 | | | 124 | | | 120 |
Net investment income | | | 175 | | | 147 | | | 144 |
Advisory fee income | | | 1 | | | 1 | | | 1 |
Policyholder benefits | | | (57) | | | (53) | | | (50) |
Interest credited to policyholder account balances | | | (108) | | | (108) | | | (105) |
Total underwriting margin(b) | | | $102 | | | $75 | | | $75 |
(a) | Represents spread income from GIC, PRT and structured settlement products. |
(b) | Represents underwriting margin from Corporate Markets products, including private placement variable universal life insurance and private placement variable annuity products. |
• | $192 million of higher net investment income primarily due to higher private equity returns of $118 million, higher call/tender income and other yield enhancements of $35 million and higher base portfolio income of $39 million driven by growth in average invested assets; and |
• | $29 million of lower interest credited to policyholder account balances due to the interest rate impacts of certain GICs and hedging instruments as well as fair value changes. |
• | $33 million increase in policyholder benefits due to interest accretion on PRT, driven by sales. |
• | $28 million of higher net investment income in the corporate- and bank-owned life insurance and high net worth businesses, including higher call/tender income and other yield enhancements of $21 million and private equity returns of $8 million. |
• | $57 million of lower interest credited to policyholder account balances due to the interest rate impacts of certain GICs and hedging instruments, partially offset by fair value changes; and |
• | $29 million of higher net investment income primarily due to private equity returns. |
• | $46 million increase in policyholder benefits due to interest accretion on PRT, driven by sales. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
PRT | | | $3,667 | | | $2,344 | | | $1,677 |
GICs | | | 1,000 | | | 2,124 | | | 717 |
Other(a) | | | 290 | | | 405 | | | 441 |
Premiums and deposits | | | $4,957 | | | $4,873 | | | $2,835 |
(a) | Other principally consists of structured settlements, high net worth and SVW products. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Revenues: | | | | | | | |||
Premiums(a) | | | $86 | | | $74 | | | $58 |
Net investment income | | | 443 | | | 346 | | | 211 |
Net realized gains on real estate investments | | | 701 | | | 54 | | | 285 |
Other income | | | 134 | | | 122 | | | 114 |
Total adjusted revenues | | | 1,364 | | | 596 | | | 668 |
Benefits and expenses: | | | | | | | |||
Non-deferrable insurance commissions | | | 3 | | | 3 | | | 3 |
General operating expenses: | | | | | | | |||
Corporate and Other(a)(b) | | | 220 | | | 179 | | | 169 |
Asset Management(c) | | | 155 | | | 130 | | | 126 |
Total General operating expenses | | | 375 | | | 309 | | | 295 |
Interest expense: | | | | | | | |||
Corporate and Other | | | 66 | | | 59 | | | 49 |
Asset Management(d) | | | 220 | | | 265 | | | 318 |
Total interest expense | | | 286 | | | 324 | | | 367 |
Total benefits and expenses | | | 664 | | | 636 | | | 665 |
Non-controlling interest(e) | | | (861) | | | (194) | | | (230) |
Adjusted pre-tax operating loss before consolidation and eliminations | | | (161) | | | (234) | | | (227) |
Consolidations and eliminations | | | (2) | | | (2) | | | (1) |
Adjusted pre-tax operating loss | | | $(163) | | | $(236) | | | $(228) |
(a) | Premiums include an expense allowance associated with Fortitude Re which is entirely offset in general and operating expenses – Corporate and other. |
(b) | General and operating expenses – Corporate and other include expenses incurred by AIG which were not billed to Corebridge of $143 million, $103 million and $85 million in the years ended 2021, 2020 and 2019, respectively. |
(c) | General operating expenses – Asset management primarily represent the costs to manage the investment portfolio for affiliates that are not included in the consolidated financial statements of Corebridge. |
(d) | Interest – Asset Management relates to consolidated investment entities, the VIEs, for which we are the primary beneficiary, however, creditors or beneficial interest holders of VIEs generally only have recourse to the assets and cash flows of the VIEs and do not have recourse to us except in limited circumstances when we have provided a guarantee to the VIE’s interest holders. As of December 31, 2021, the VIEs for which Corebridge previously provided guarantees have been terminated. Interest expense on consolidated investment entities was $216 million, $257 million and $304 million for the years ended 2021, 2020 and 2019, respectively. |
(e) | Noncontrolling interests represent the third party or Corebridge affiliated interest in internally managed consolidated investment vehicles and is almost entirely offset within net investment income, net realized gains (losses) and interest expense. The retained interest for internal funds consolidated by entities within asset management entities in Corporate and Other is immaterial. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Parent expenses(a) | | | $(143) | | | $(103) | | | $(85) |
Interest expense on financial debt | | | (66) | | | (59) | | | (50) |
Asset management | | | 30 | | | (15) | | | 34 |
Consolidated investment entities(b) | | | 19 | | | (62) | | | (105) |
Fortitude Re | | | 7 | | | 8 | | | (16) |
Other | | | (10) | | | (5) | | | (6) |
Adjusted pre-tax operating income | | | $(163) | | | $(236) | | | $(228) |
(a) | Represents expenses incurred by AIG which were not billed to Corebridge. |
(b) | Includes $(25) million, $(88) million and $(111) million of APTOI attributable to six transactions AIG entered into between 2012 and 2014 which securitized portfolios of certain debt securities, the majority of which were previously owned by Corebridge. During the year ended December 31, 2021, all six transactions were terminated. See Note 9 to the audited consolidated financial statements. |
• | higher income from consolidated investment entities of $97 million primarily from lower interest expense on certain consolidated investment entities which were terminated during 2021 as well as gains in certain consolidated real estate investment funds; and |
• | higher income from legacy investments held outside of the investment insurance companies. |
• | higher parent expenses of $40 million primarily due to an increase in expenses related to AIG which were not billed to Corebridge. |
• | lower income from legacy investments held outside of the investment insurance companies; and |
• | higher parent expenses of $18 million primarily due to an increase in expenses related to AIG which were not billed to Corebridge. |
• | higher income from consolidated investment entities of $43 million primarily due to lower interest expense on certain consolidated investment entities; and |
• | higher income from Fortitude Re related to amended modco agreement terms AGL and USL entered into with Fortitude Re on July 1, 2020. |
• | our fundamental strategy across the portfolios is to seek investments with characteristics similar to the associated insurance liabilities to the extent practicable; |
• | we seek to invest in a portfolio of investments that offer enhanced yield through illiquidity premiums, such as private placements and commercial mortgage loans, which also add portfolio diversification. These assets typically afford stronger credit protections through financial covenants, ability to customize structures that meet our insurance liability needs, and deeper due diligence; |
• | we have access to investments that provide diversification from local markets. To the extent we purchase these investments, we generally hedge any currency risk using derivatives, which could provide opportunities to earn higher risk adjusted returns compared to assets in the functional currency; |
• | we actively manage our assets and liabilities, counterparties and duration. Our liquidity sources are held primarily in the form of cash, short-term investments and publicly traded, investment grade rated fixed maturity securities that can be readily monetized through sales or repurchase agreements. This strategy allows us to both diversify our sources of liquidity and reduce the cost of maintaining sufficient liquidity; |
• | within the United States, investments are generally split between reserve-backing and surplus portfolios; and |
— | Insurance reserves are backed by mainly investment grade fixed maturity securities that meet our duration, risk-return, tax, liquidity, credit quality and diversification objectives. We assess asset classes based on their fundamental underlying risk factors, including credit (public and private), commercial real estate, and residential real estate regardless of whether such investments are bonds, loans, or structured products. |
— | Surplus investments seek to enhance portfolio returns and generally comprise a mix of fixed maturity investment grade and below investment grade securities and various alternative asset |
• | outside of the United States, fixed maturity securities held by insurance companies consist primarily of investment-grade securities generally denominated in the currencies of the countries in which we operate. |
(in millions) | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total |
At December 31, 2021 | | | | | | | |||
Bonds available for sale: | | | | | | | |||
U.S. government and government sponsored entities | | | $1,255 | | | $457 | | | $1,712 |
Obligations of states, municipalities and political subdivisions | | | 7,240 | | | 1,436 | | | 8,676 |
Non-U.S. governments | | | 5,579 | | | 818 | | | 6,397 |
Corporate debt | | | 118,715 | | | 21,348 | | | 140,063 |
Mortgage-backed, asset-backed and collateralized: | | | | | | | |||
RMBS | | | 13,850 | | | 1,108 | | | 14,958 |
CMBS | | | 10,311 | | | 989 | | | 11,300 |
CLO/ABS | | | 14,438 | | | 1,024 | | | 15,462 |
Total mortgage-backed, asset-backed and collateralized | | | 38,599 | | | 3,121 | | | 41,720 |
Total bonds available for sale | | | 171,388 | | | 27,180 | | | 198,568 |
Other bond securities | | | 489 | | | 1,593 | | | 2,082 |
Total fixed maturities | | | 171,877 | | | 28,773 | | | 200,650 |
(in millions) | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total |
Equity securities | | | 241 | | | 1 | | | 242 |
Mortgage and other loans receivable: | | | | | | | |||
Residential mortgages | | | 4,671 | | | — | | | 4,671 |
Commercial mortgages | | | 27,176 | | | 2,929 | | | 30,105 |
Life insurance policy loans | | | 1,452 | | | 380 | | | 1,832 |
Commercial loans, other loans and notes receivable | | | 2,530 | | | 250 | | | 2,780 |
Total Mortgage and other loans receivable(a) | | | 35,829 | | | 3,559 | | | 39,388 |
Other invested assets | | | 8,760 | | | 1,807 | | | 10,567 |
Short term investments | | | 5,421 | | | 50 | | | 5,471 |
Total(b) | | | $222,128 | | | $34,190 | | | $256,318 |
At December 31, 2020 | | | | | | | |||
Bonds available for sale: | | | | | | | |||
U.S. government and government sponsored entities | | | $1,408 | | | $488 | | | $1,896 |
Obligations of states, municipalities and political subdivisions | | | 7,934 | | | 1,635 | | | 9,569 |
Non-U.S. governments | | | 4,952 | | | 786 | | | 5,738 |
Corporate debt | | | 113,836 | | | 23,578 | | | 137,414 |
Mortgage-backed, asset-backed and collateralized: | | | | | | | |||
RMBS | | | 16,247 | | | 1,614 | | | 17,861 |
CMBS | | | 9,902 | | | 1,457 | | | 11,359 |
CLO/ABS | | | 13,162 | | | 942 | | | 14,104 |
Total mortgage-backed, asset-backed and collateralized | | | 39,311 | | | 4,013 | | | 43,324 |
Total bonds available for sale | | | 167,441 | | | 30,500 | | | 197,941 |
Other bond securities | | | 659 | | | 121 | | | 780 |
Total fixed maturities | | | 168,100 | | | 30,621 | | | 198,721 |
Equity securities | | | 609 | | | — | | | 609 |
Mortgage and other loans receivable: | | | | | | | |||
Residential mortgages | | | 3,583 | | | — | | | 3,583 |
Commercial mortgages | | | 27,489 | | | 2,995 | | | 30,484 |
Life insurance policy loans | | | 1,559 | | | 413 | | | 1,972 |
Commercial loans, other loans and notes receivable | | | 2,079 | | | 196 | | | 2,275 |
Total Mortgage and other loans receivable(a) | | | 34,710 | | | 3,604 | | | 38,314 |
Other invested assets | | | 11,869 | | | 1,526 | | | 13,395 |
Short term investments | | | 9,201 | | | 34 | | | 9,235 |
Total | | | $224,489 | | | $35,785 | | | $260,274 |
(a) | Net of total allowance for credit losses of $496 million and $657 million at December 31, 2021 and December 31, 2020, respectively. |
(b) | Includes the consolidation of approximately $11.4 billion of consolidated investment entities. |
(in millions) | | | At December 31, 2021 |
Public Credit | | | 97,912 |
Private Credit | | | 24,264 |
Structured | | | 35,363 |
Mortgage Loans | | | 32,764 |
Bank Loans | | | 3,670 |
US Government/Agency | | | 8,480 |
Alternatives | | | 5,685 |
Cash & Short-Term Investments | | | 4,329 |
Total(a)(b)(c) | | | 212,467 |
(a) | Does not reflect allowance for credit loss of $447 million. |
(b) | Does not reflect policy loans of $1.5 billion. |
(c) | Excludes approximately $11.4 billion of consolidated investment entities as well as $2.7 billion of eliminations primarily between the consolidated investment entities and the insurance operating companies. |
NAIC Designation Excluding Fortitude Re Funds Withheld Assets (in millions) | | | 1 | | | 2 | | | Total Investment Grade | | | 3 | | | 4(a) | | | 5(a) | | | 6 | | | Total Below Investment Grade | | | Total |
At December 31, 2021 | | | | | | | | | | | | | | | | | | | |||||||||
Other fixed maturity securities | | | $59,367 | | | $60,131 | | | $119,498 | | | $5,743 | | | $6,698 | | | $803 | | | $58 | | | $13,302 | | | $132,800 |
Mortgage-backed, asset-backed and collateralized | | | 35,241 | | | 3,402 | | | 38,643 | | | 146 | | | 88 | | | 20 | | | 180 | | | 434 | | | 39,077 |
Total | | | $94,608 | | | $63,533 | | | $158,141 | | | $5,889 | | | $6,786 | | | $823 | | | $238 | | | $13,736 | | | $171,877 |
Fortitude Re funds withheld assets | | | | | | | | | | | | | | | | | | | $28,773 | ||||||||
Total fixed maturities | | | | | | | | | | | | | | | | | | | $200,650 | ||||||||
At December 31, 2020 | | | | | | | | | | | | | | | | | | | |||||||||
Other fixed maturity securities | | | $56,674 | | | $58,321 | | | $114,995 | | | $6,878 | | | $5,042 | | | $1,117 | | | $83 | | | $13,120 | | | $128,115 |
Mortgage-backed, asset-backed and collateralized | | | 37,004 | | | 2,478 | | | 39,482 | | | 193 | | | 54 | | | 28 | | | 213 | | | 488 | | | 39,970 |
Total(b) | | | $93,678 | | | $60,799 | | | $154,477 | | | $7,071 | | | $5,096 | | | $1,145 | | | $296 | | | $13,608 | | | $168,085 |
Fortitude Re funds withheld assets | | | | | | | | | | | | | | | | | | | $30,621 | ||||||||
Total Fixed Maturities | | | | | | | | | | | | | | | | | | | $198,706 |
(a) | Includes $3.4 billion and $50 million of consolidated collateralized loan obligations that are rated NAIC 4 and 5 as of December 31, 2021 and $2.0 billion and $88 million of NAIC 4 and 5 securities as of December 31, 2020. These are assets of consolidated investment entities and do not represent direct investment of Corebridge’s insurance subsidiaries. |
(b) | Excludes $15 million of fixed maturity securities for which no NAIC Designation is available at December 31, 2020. |
(in millions) | | | At December 31, 2021 |
NAIC 1 | | | 95,323 |
NAIC 2 | | | 63,934 |
NAIC 3 | | | 5,683 |
NAIC 4 | | | 3,434 |
NAIC 5 & 6 | | | 1,150 |
Total(a) | | | 169,524 |
(a) | Excludes approximately $3.7 billion of consolidated investment entities and $1.4 billion of eliminations primarily related to the consolidated investment entities and the insurance operating subsidiaries. |
Composite Corebridge Credit Rating Excluding Fortitude Re Funds Withheld Assets (in millions) | | | AAA/ AAA | | | BBB | | | Total Investment Grade | | | BB | | | B | | | CCC and Lower | | | Total Below Investment Grade(a)(b) | | | Total |
At December 31, 2021 | | | | | | | | | | | | | | | | | ||||||||
Other fixed maturity securities | | | $61,496 | | | $58,049 | | | $119,545 | | | $5,767 | | | $5,014 | | | $2,474 | | | $13,255 | | | $132,800 |
Mortgage-backed, asset-backed and collateralized | | | 30,363 | | | 3,876 | | | 34,239 | | | 375 | | | 359 | | | 4,104 | | | 4,838 | | | 39,077 |
Total | | | $91,859 | | | $61,925 | | | $153,784 | | | $6,142 | | | $5,373 | | | $6,578 | | | $18,093 | | | $171,877 |
Fortitude Re funds withheld assets | | | | | | | | | | | | | | | | | $28,773 | |||||||
Total fixed maturities | | | | | | | | | | | | | | | | | $200,650 | |||||||
At December 31, 2020 | | | | | | | | | | | | | | | | | ||||||||
Other fixed maturity securities | | | $58,358 | | | $56,711 | | | $115,069 | | | $6,491 | | | $4,848 | | | $1,707 | | | $13,046 | | | $128,115 |
Mortgage-backed, asset-backed and collateralized | | | 31,678 | | | 2,698 | | | 34,376 | | | 451 | | | 257 | | | 4,886 | | | 5,594 | | | 39,970 |
Total(c) | | | $90,036 | | | $59,409 | | | $149,445 | | | $6,942 | | | $5,105 | | | $6,593 | | | $18,640 | | | $168,085 |
Fortitude Re funds withheld assets | | | | | | | | | | | | | | | | | $30,621 | |||||||
Total fixed maturities | | | | | | | | | | | | | | | | | $198,706 |
(a) | Includes $4.1 billion and $5.1 billion at December 31, 2021 and December 31, 2020, respectively, of certain RMBS that had experienced deterioration in credit quality since their origination but prior to Corebridge’s acquisition. These securities are currently rated as investment grade under the NAIC SVO framework. For additional discussion on Purchased Credit Impaired Securities see Note 5 to our audited consolidated financial statements. |
(b) | Includes $3.7 billion of consolidated collateralized loan obligations as of December 31, 2021 and $2.3 billion as of December 31, 2020. These are assets of consolidated investment entities and do not represent direct investment of Corebridge’s insurance subsidiaries. |
(c) | Excludes $15 million of fixed maturity securities for which no NAIC Designation is available at December 31, 2020. |
At December 31, Excluding Fortitude Re Funds Withheld Assets (in millions) | | | Available for Sale | | | Fair Value Option | | | Total | |||||||||
| 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2021 | | | 2020 | ||
Rating: | | | | | | | | | | | | | ||||||
Other fixed maturity securities | | | | | | | | | | | | | ||||||
AAA | | | $3,516 | | | $3,653 | | | $— | | | $— | | | $3,516 | | | $3,653 |
AA | | | 23,214 | | | 20,258 | | | — | | | — | | | 23,214 | | | 20,258 |
A | | | 34,766 | | | 34,447 | | | — | | | — | | | 34,766 | | | 34,447 |
BBB | | | 58,045 | | | 56,711 | | | 4 | | | — | | | 58,049 | | | 56,711 |
Below investment grade | | | 11,677 | | | 12,340 | | | 7 | | | — | | | 11,684 | | | 12,340 |
Non-rated | | | 1,571 | | | 721 | | | — | | | — | | | 1,571 | | | 721 |
Total | | | $132,789 | | | $128,130 | | | $11 | | | $— | | | $132,800 | | | $128,130 |
Mortgage-backed, asset- backed and collateralized | | | | | | | | | | | | | ||||||
AAA | | | $13,002 | | | $15,816 | | | $26 | | | $112 | | | $13,028 | | | $15,928 |
AA | | | 12,173 | | | 11,228 | | | 83 | | | 126 | | | 12,256 | | | 11,354 |
A | | | 4,957 | | | 4,267 | | | 122 | | | 129 | | | 5,079 | | | 4,396 |
BBB | | | 3,820 | | | 2,638 | | | 56 | | | 60 | | | 3,876 | | | 2,698 |
Below investment grade | | | 4,634 | | | 5,340 | | | 151 | | | 200 | | | 4,785 | | | 5,540 |
Non-rated | | | 13 | | | 22 | | | 40 | | | 32 | | | 53 | | | 54 |
Total | | | $38,599 | | | $39,311 | | | $ 478 | | | $659 | | | $39,077 | | | $39,970 |
Total | | | | | | | | | | | | | ||||||
AAA | | | $16,518 | | | $19,469 | | | $26 | | | $112 | | | $16,544 | | | $19,581 |
AA | | | 35,387 | | | 31,486 | | | 83 | | | 126 | | | 35,470 | | | 31,612 |
A | | | 39,723 | | | 38,714 | | | 122 | | | 129 | | | 39,845 | | | 38,843 |
BBB | | | 61,865 | | | 59,349 | | | 60 | | | 60 | | | 61,925 | | | 59,409 |
Below investment grade | | | 16,311 | | | 17,680 | | | 158 | | | 200 | | | 16,469 | | | 17,880 |
Non-rated | | | 1,584 | | | 743 | | | 40 | | | 32 | | | 1,624 | | | 775 |
Total | | | $171,388 | | | $167,441 | | | $ 489 | | | $659 | | | $171,877 | | | $168,100 |
At December 31, Fortitude Re Funds Withheld Assets (in millions) | | | Available for Sale | | | Fair Value Option | | | Total | |||||||||
| 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2021 | | | 2020 | ||
Rating: | | | | | | | | | | | | | ||||||
Other fixed maturity securities securities | | | | | | | | | | | | | ||||||
AAA | | | $720 | | | $861 | | | $31 | | | $— | | | $751 | | | $861 |
AA | | | 5,444 | | | 5,609 | | | 227 | | | — | | | 5,671 | | | 5,609 |
A | | | 6,359 | | | 7,785 | | | 109 | | | — | | | 6,468 | | | 7,785 |
BBB | | | 9,873 | | | 10,805 | | | 384 | | | — | | | 10,257 | | | 10,805 |
Below investment grade | | | 1,663 | | | 1,427 | | | 305 | | | — | | | 1,968 | | | 1,427 |
Non-rated | | | — | | | — | | | — | | | — | | | — | | | — |
Total | | | $24,059 | | | $26,487 | | | $1,056 | | | $— | | | $25,115 | | | $26,487 |
Mortgage-backed, asset- backed and collateralized | | | | | | | | | | | | | ||||||
AAA | | | $517 | | | $1,043 | | | $31 | | | $10 | | | $548 | | | $1,053 |
AA | | | 945 | | | 1,086 | | | 314 | | | 19 | | | 1,259 | | | 1,105 |
A | | | 367 | | | 437 | | | 59 | | | 10 | | | 426 | | | 447 |
BBB | | | 447 | | | 379 | | | 60 | | | 10 | | | 507 | | | 389 |
Below investment grade | | | 838 | | | 1,060 | | | 72 | | | 69 | | | 910 | | | 1,129 |
Non-rated | | | 7 | | | 8 | | | 1 | | | 3 | | | 8 | | | 11 |
Total | | | $3,121 | | | $4,013 | | | $537 | | | $121 | | | $3,658 | | | $4,134 |
Total | | | | | | | | | | | | | ||||||
AAA | | | $1,237 | | | $1,904 | | | $62 | | | $10 | | | $1,299 | | | $1,914 |
AA | | | 6,389 | | | 6,695 | | | 541 | | | 19 | | | 6,930 | | | 6,714 |
A | | | 6,726 | | | 8,222 | | | 168 | | | 10 | | | 6,894 | | | 8,232 |
BBB | | | 10,320 | | | 11,184 | | | 444 | | | 10 | | | 10,764 | | | 11,194 |
Below investment grade | | | 2,501 | | | 2,487 | | | 377 | | | 69 | | | 2,878 | | | 2,556 |
Non-rated | | | 7 | | | 8 | | | 1 | | | 3 | | | 8 | | | 11 |
Total | | | $27,180 | | | $30,500 | | | $1,593 | | | $121 | | | $28,773 | | | $30,621 |
At December 31, Total (in millions) | | | Available for Sale | | | Fair Value Option | | | Total | |||||||||
| | 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2021 | | | 2020 | |
Rating: | | | | | | | | | | | | | ||||||
Other fixed maturity securities | | | | | | | | | | | | | ||||||
AAA | | | $4,236 | | | $4,514 | | | $31 | | | $— | | | $4,267 | | | $4,514 |
AA | | | 28,658 | | | 25,867 | | | 227 | | | — | | | 28,885 | | | 25,867 |
A | | | 41,125 | | | 42,232 | | | 109 | | | — | | | 41,234 | | | 42,232 |
BBB | | | 67,918 | | | 67,516 | | | 388 | | | — | | | 68,306 | | | 67,516 |
Below investment grade | | | 13,340 | | | 13,767 | | | 312 | | | — | | | 13,652 | | | 13,767 |
Non-rated | | | 1,571 | | | 721 | | | — | | | — | | | 1,571 | | | 721 |
Total | | | $156,848 | | | $154,617 | | | $1,067 | | | $— | | | $157,915 | | | $154,617 |
Mortgage-backed, asset- backed and collateralized | | | | | | | | | | | | | ||||||
AAA | | | $13,519 | | | $16,859 | | | $57 | | | $122 | | | $13,576 | | | $16,981 |
AA | | | 13,118 | | | 12,314 | | | 397 | | | 145 | | | 13,515 | | | 12,459 |
A | | | 5,324 | | | 4,704 | | | 181 | | | 139 | | | 5,505 | | | 4,843 |
BBB | | | 4,267 | | | 3,017 | | | 116 | | | 70 | | | 4,383 | | | 3,087 |
Below investment grade | | | 5,472 | | | 6,400 | | | 223 | | | 269 | | | 5,695 | | | 6,669 |
Non-rated | | | 20 | | | 30 | | | 41 | | | 35 | | | 61 | | | 65 |
Total | | | $41,720 | | | $43,324 | | | $1,015 | | | $780 | | | $42,735 | | | $44,104 |
Total | | | | | | | | | | | | | ||||||
AAA | | | $17,755 | | | $21,373 | | | $88 | | | $122 | | | $17,843 | | | $21,495 |
AA | | | 41,776 | | | 38,181 | | | 624 | | | 145 | | | 42,400 | | | 38,326 |
A | | | 46,449 | | | 46,936 | | | 290 | | | 139 | | | 46,739 | | | 47,075 |
BBB | | | 72,185 | | | 70,533 | | | 504 | | | 70 | | | 72,689 | | | 70,603 |
Below investment grade | | | 18,812 | | | 20,167 | | | 535 | | | 269 | | | 19,347 | | | 20,436 |
Non-rated | | | 1,591 | | | 751 | | | 41 | | | 35 | | | 1,632 | | | 786 |
Total | | | $198,568 | | | $197,941 | | | $2,082 | | | $780 | | | $200,650 | | | $198,721 |
At December 31, (in millions) | | | 2021 | | | 2020 | ||||||||||||
| Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | ||
Indonesia | | | $472 | | | $50 | | | $522 | | | $421 | | | $42 | | | $463 |
Chile | | | 443 | | | 28 | | | 471 | | | 341 | | | 29 | | | 370 |
United Arab Emirates | | | 372 | | | 19 | | | 391 | | | 380 | | | 21 | | | 401 |
Qatar | | | 276 | | | 113 | | | 389 | | | 273 | | | 124 | | | 397 |
Mexico | | | 299 | | | 74 | | | 373 | | | 213 | | | 51 | | | 264 |
United Kingdom | | | 346 | | | — | | | 346 | | | 75 | | | — | | | 75 |
Saudi Arabia | | | 258 | | | 29 | | | 287 | | | 81 | | | 23 | | | 104 |
France | | | 225 | | | 36 | | | 261 | | | 163 | | | 53 | | | 216 |
Panama | | | 206 | | | 34 | | | 240 | | | 208 | | | 33 | | | 241 |
Norway | | | 225 | | | — | | | 225 | | | 236 | | | 22 | | | 258 |
Other* | | | 2,457 | | | 452 | | | 2,909 | | | 2,561 | | | 388 | | | 2,949 |
Total | | | $5,579 | | | $835 | | | $6,414 | | | $4,952 | | | $786 | | | $5,738 |
* | Our credit exposure to fixed maturity securities issued by the Russian Federation was $141 million and $131 million at December 31, 2021 and December 31, 2020, respectively, which represents 2% of our aggregate credit exposures to non-U.S. governments for our fixed maturity securities for both years. Subsequent to December 31, 2021, we have sold approximately $103 million of our fixed maturity securities issued by the Russian Federation. Our credit exposure to fixed maturity securities issued by Ukraine is immaterial for both periods. |
At December 31, (in millions) | | | 2021 | | | 2020 | ||||||||||||
| Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | ||
Industry Category: | | | | | | | | | | | | | ||||||
Financial Institutions | | | $29,317 | | | $4,231 | | | $33,548 | | | $27,596 | | | $4,324 | | | $31,920 |
Utilities | | | 17,194 | | | 4,161 | | | 21,355 | | | 16,105 | | | 4,665 | | | 20,770 |
Communications | | | 7,653 | | | 1,555 | | | 9,208 | | | 7,432 | | | 1,756 | | | 9,188 |
Consumer noncyclical | | | 16,870 | | | 2,906 | | | 19,776 | | | 16,929 | | | 3,593 | | | 20,522 |
Capital goods | | | 5,869 | | | 884 | | | 6,753 | | | 6,207 | | | 1,023 | | | 7,230 |
Energy | | | 9,626 | | | 1,797 | | | 11,423 | | | 9,685 | | | 1,833 | | | 11,518 |
Consumer cyclical | | | 8,605 | | | 946 | | | 9,551 | | | 8,824 | | | 1,209 | | | 10,033 |
Basic materials | | | 4,210 | | | 820 | | | 5,030 | | | 3,965 | | | 1,005 | | | 4,970 |
Other | | | 19,371 | | | 4,048 | | | 23,419 | | | 17,093 | | | 4,170 | | | 21,263 |
Total* | | | $118,715 | | | $21,348 | | | $140,063 | | | $113,836 | | | $23,578 | | | $137,414 |
* | At December 31, 2021 and December 31, 2020, 90% of these investments were rated investment grade. |
At December 31, (in millions) | | | 2021 | | | 2020 | ||||||
| Fair Value | | | Percent of Total | | | Fair Value | | | Percent of Total | ||
Agency RMBS | | | $5,909 | | | 43% | | | $7,420 | | | 46% |
AAA | | | 5,736 | | | | | 7,248 | | | ||
AA | | | 173 | | | | | 172 | | | ||
A | | | — | | | | | — | | | ||
BBB | | | — | | | | | — | | | ||
Below investment grade | | | — | | | | | — | | | ||
Non-rated | | | — | | | | | — | | | ||
Alt-A RMBS | | | 3,523 | | | 25% | | | 4,137 | | | 25% |
AAA | | | 4 | | | | | 13 | | | ||
AA | | | 828 | | | | | 932 | | | ||
A | | | 40 | | | | | 42 | | | ||
BBB | | | 63 | | | | | 67 | | | ||
Below investment grade | | | 2,588 | | | | | 3,083 | | | ||
Non-rated | | | — | | | | | — | | | ||
Subprime RMBS | | | 1,522 | | | 11% | | | 1,583 | | | 10% |
AAA | | | — | | | | | 14 | | | ||
AA | | | 37 | | | | | 32 | | | ||
A | | | 99 | | | | | 76 | | | ||
BBB | | | 61 | | | | | 72 | | | ||
Below investment grade | | | 1,325 | | | | | 1,389 | | | ||
Non-rated | | | — | | | | | — | | | ||
Prime Non-Agency | | | 1,851 | | | 13% | | | 2,088 | | | 13% |
AAA | | | 290 | | | | | 514 | | | ||
AA | | | 838 | | | | | 733 | | | ||
A | | | 207 | | | | | 155 | | | ||
BBB | | | 191 | | | | | 126 | | | ||
Below investment grade | | | 325 | | | | | 560 | | | ||
Non-rated | | | — | | | | | — | | | ||
Other Housing Related(a) | | | 1,045 | | | 8% | | | 1,019 | | | 6% |
AAA | | | 319 | | | | | 293 | | | ||
AA | | | 497 | | | | | 479 | | | ||
A | | | 196 | | | | | 197 | | | ||
BBB | | | 23 | | | | | 25 | | | ||
Below investment grade | | | 8 | | | | | 24 | | | ||
Non-rated | | | 2 | | | | | 1 | | | ||
Total RMBS Excluding Fortitude Re Funds Withheld Assets | | | 13,850 | | | 100% | | | 16,247 | | | 100% |
Total RMBS Fortitude Re Funds Withheld Assets | | | 1,108 | | | | | 1,614 | | | ||
Total RMBS(a)(b) | | | $14,958 | | | | | $17,861 | | |
(a) | Includes $4.1 billion and $5.1 billion at December 31, 2021 and December 31, 2020, respectively, of certain RMBS that had experienced deterioration in credit quality since their origination but prior to Corebridge’s acquisition. These securities are currently rated as investment grade under the NAIC SVO framework. For additional discussion on Purchased Credit Impaired Securities see Note 5 to our audited consolidated financial statements. |
(b) | The weighted-average expected life was five years at December 31, 2021 and five years at December 31, 2020. |
At December 31, (in millions) | | | 2021 | | | 2020 | ||||||
| Fair Value | | | Percent of Total | | | Fair Value | | | Percent of Total | ||
CMBS (traditional) | | | $8,333 | | | 81% | | | $7,646 | | | 77% |
AAA | | | 4,447 | | | | | 4,806 | | | ||
AA | | | 2,675 | | | | | 2,112 | | | ||
A | | | 446 | | | | | 323 | | | ||
BBB | | | 408 | | | | | 181 | | | ||
Below investment grade | | | 357 | | | | | 224 | | | ||
Non-rated | | | — | | | | | — | | | ||
Agency | | | 1,309 | | | 13% | | | 1,574 | | | 16% |
AAA | | | 619 | | | | | 666 | | | ||
AA | | | 676 | | | | | 894 | | | ||
A | | | — | | | | | — | | | ||
BBB | | | 14 | | | | | 14 | | | ||
Below investment grade | | | — | | | | | — | | | ||
Non-rated | | | — | | | | | — | | | ||
Other | | | 669 | | | 6% | | | 682 | | | 7% |
AAA | | | 91 | | | | | 89 | | | ||
AA | | | 143 | | | | | 182 | | | ||
A | | | 309 | | | | | 291 | | | ||
BBB | | | 116 | | | | | 101 | | | ||
Below investment grade | | | 1 | | | | | 1 | | | ||
Non-rated | | | 9 | | | | | 18 | | | ||
Total Excluding Fortitude Re Funds Withheld Assets | | | 10,311 | | | 100% | | | 9,902 | | | 100% |
Total Fortitude Re Funds Withheld Assets | | | 989 | | | | | 1,457 | | | ||
Total | | | $11,300 | | | | | $11,359 | | |
At December 31, (in millions) | | | 2021 | | | 2020 | ||||||
| Fair Value | | | Percent of Total | | | Fair Value | | | Percent of Total | ||
CDO - Bank Loan (CLO) | | | $6,318 | | | 44% | | | $6,569 | | | 50% |
AAA | | | 1,078 | | | | | 1,941 | | | ||
AA | | | 3,599 | | | | | 3,360 | | | ||
A | | | 1,494 | | | | | 1,192 | | | ||
BBB | | | 142 | | | | | 76 | | | ||
Below investment grade | | | 5 | | | | | — | | | ||
Non-rated | | | — | | | | | — | | | ||
CDO - Other | | | 845 | | | 6% | | | 1,040 | | | 8% |
AAA | | | — | | | | | — | | | ||
AA | | | 824 | | | | | 1,031 | | | ||
A | | | — | | | | | — | | | ||
BBB | | | — | | | | | — | | | ||
Below investment grade | | | 21 | | | | | 8 | | | ||
Non-rated | | | — | | | | | 1 | | | ||
ABS | | | 7,275 | | | 50% | | | 5,553 | | | 42% |
AAA | | | 418 | | | | | 232 | | | ||
AA | | | 1,883 | | | | | 1,301 | | | ||
A | | | 2,166 | | | | | 1,991 | | | ||
BBB | | | 2,802 | | | | | 1,976 | | | ||
Below investment grade | | | 4 | | | | | 51 | | | ||
Non-rated | | | 2 | | | | | 2 | | | ||
Total Excluding Fortitude Re Funds Withheld Assets | | | 14,438 | | | 100% | | | 13,162 | | | 100% |
Total Fortitude Re Funds Withheld Assets | | | 1,024 | | | | | 942 | | | ||
Total | | | $15,462 | | | | | $14,104 | | |
| | Less Than or Equal to 20% of Cost(b) | | | Greater Than 20% to 50% of Cost(b) | | | Greater Than 50% of Cost(b) | | | Total | |||||||||||||||||||||||||
| | Unrealized | | | Unrealized | | | Unrealized | | | Unrealized | |||||||||||||||||||||||||
Aging(a) (dollars in millions) | | | Cost(c) | | | Loss | | | Items(e) | | | Cost(c) | | | Loss | | | Items(e) | | | Cost(c) | | | Loss | | | Items(e) | | | Cost(c) | | | Loss(d) | | | Items(e) |
At December 31, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Investment grade bonds | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
0-6 months | | | $22,675 | | | $476 | | | 2,549 | | | $14 | | | $5 | | | 3 | | | $1 | | | $1 | | | 1 | | | $22,690 | | | $482 | | | 2,553 |
7-11 months | | | 1,398 | | | 69 | | | 196 | | | 4 | | | 1 | | | 2 | | | 1 | | | 1 | | | 1 | | | 1,403 | | | 71 | | | 199 |
12 months or more | | | 4,932 | | | 276 | | | 684 | | | 28 | | | 8 | | | 9 | | | — | | | — | | | — | | | 4,960 | | | 284 | | | 693 |
Total | | | $29,005 | | | $821 | | | 3,429 | | | $46 | | | $14 | | | 14 | | | $2 | | | $2 | | | 2 | | | $29,053 | | | $837 | | | 3,445 |
Below investment grade bonds | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
0-6 months | | | $3,902 | | | $76 | | | 1,385 | | | $11 | | | $4 | | | 12 | | | $4 | | | $3 | | | 7 | | | $3,917 | | | $83 | | | 1,404 |
7-11 months | | | 972 | | | 23 | | | 440 | | | 20 | | | 5 | | | 6 | | | 1 | | | 1 | | | 1 | | | 993 | | | 29 | | | 447 |
12 months or more | | | 1,624 | | | 66 | | | 417 | | | 202 | | | 51 | | | 26 | | | 51 | | | 35 | | | 18 | | | 1,877 | | | 152 | | | 461 |
Total | | | $6,498 | | | $165 | | | 2,242 | | | $233 | | | $60 | | | 44 | | | $56 | | | $39 | | | 26 | | | $6,787 | | | $264 | | | 2,312 |
| | Less Than or Equal to 20% of Cost(b) | | | Greater Than 20% to 50% of Cost(b) | | | Greater Than 50% of Cost(b) | | | Total | |||||||||||||||||||||||||
| | Unrealized | | | Unrealized | | | Unrealized | | | Unrealized | |||||||||||||||||||||||||
Aging(a) (dollars in millions) | | | Cost(c) | | | Loss | | | Items(e) | | | Cost(c) | | | Loss | | | Items(e) | | | Cost(c) | | | Loss | | | Items(e) | | | Cost(c) | | | Loss(d) | | | Items(e) |
Total bonds | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
0-6 months | | | $26,577 | | | $552 | | | 3,934 | | | $25 | | | $9 | | | 15 | | | $5 | | | $4 | | | 8 | | | $26,607 | | | $565 | | | 3,957 |
7-11 months | | | 2,370 | | | 92 | | | 636 | | | 24 | | | 6 | | | 8 | | | 2 | | | 2 | | | 2 | | | 2,396 | | | 100 | | | 646 |
12 months or more | | | 6,556 | | | 342 | | | 1,101 | | | 230 | | | 59 | | | 35 | | | 51 | | | 35 | | | 18 | | | 6,837 | | | 436 | | | 1,154 |
Total Excluding Fortitude Re Funds Withheld Assets | | | $35,503 | | | $986 | | | 5,671 | | | $279 | | | $74 | | | 58 | | | $58 | | | $41 | | | 28 | | | $35,840 | | | $1,101 | | | 5,757 |
Total Fortitude Re Funds Withheld Assets | | | | | | | | | | | | | | | | | | | | | $4,856 | | | $174 | | | 556 | |||||||||
Total | | | | | | | | | | | | | | | | | | | | | $40,696 | | | $1,275 | | | 6,313 | |||||||||
At December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Investment grade bonds | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
0-6 months | | | $7,102 | | | $130 | | | 639 | | | $— | | | $— | | | — | | | $— | | | $— | | | — | | | $7,102 | | | $130 | | | 639 |
7-11 months | | | 2,560 | | | $84 | | | 253 | | | 16 | | | 7 | | | 4 | | | — | | | — | | | — | | | 2,576 | | | 91 | | | 257 |
12 months or more | | | 2,811 | | | $77 | | | 247 | | | 37 | | | 14 | | | 8 | | | 2 | | | 1 | | | 1 | | | 2,850 | | | 92 | | | 256 |
Total | | | $12,473 | | | $291 | | | 1,139 | | | $53 | | | $21 | | | 12 | | | $2 | | | $1 | | | 1 | | | $12,528 | | | $313 | | | 1,152 |
Below investment grade bonds | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
0-6 months | | | $779 | | | $24 | | | 289 | | | $9 | | | $3 | | | 11 | | | $6 | | | $8 | | | 6 | | | $794 | | | $35 | | | 306 |
7-11 months | | | 3,647 | | | 117 | | | 819 | | | 16 | | | 4 | | | 5 | | | — | | | — | | | — | | | 3,663 | | | 121 | | | 824 |
12 months or more | | | 943 | | | 55 | | | 351 | | | 168 | | | 44 | | | 14 | | | 20 | | | 15 | | | 12 | | | 1,131 | | | 114 | | | 377 |
Total | | | $5,369 | | | $196 | | | 1,459 | | | $193 | | | $51 | | | 30 | | | $26 | | | $23 | | | 18 | | | $5,588 | | | $270 | | | 1,507 |
Total bonds | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
0-6 months | | | $7,881 | | | $154 | | | 928 | | | $9 | | | $3 | | | 11 | | | $6 | | | $8 | | | 6 | | | $7,896 | | | $165 | | | 945 |
7-11 months | | | 6,207 | | | 201 | | | 1,072 | | | 32 | | | 11 | | | 9 | | | — | | | — | | | — | | | 6,239 | | | 212 | | | 1,081 |
12 months or more | | | 3,754 | | | 132 | | | 598 | | | 205 | | | 58 | | | 22 | | | 22 | | | 16 | | | 13 | | | 3,981 | | | 206 | | | 633 |
Total Excluding Fortitude Re Funds Withheld Assets | | | $17,842 | | | $487 | | | 2,598 | | | $246 | | | $72 | | | 42 | | | $28 | | | $24 | | | 19 | | | $18,116 | | | $583 | | | 2,659 |
Total Fortitude Re Funds Withheld Assets | | | | | | | | | | | | | | | | | | | | | $1,324 | | | $61 | | | 198 | |||||||||
Total | | | | | | | | | | | | | | | | | | | | | $19,440 | | | $644 | | | 2,857 |
(a) | Represents the number of consecutive months that fair value has been less than amortized cost or cost by any amount. |
(b) | Represents the percentage by which fair value is less than amortized cost or cost at December 31, 2021 and December 31, 2020. |
(c) | For bonds, represents amortized cost net of allowance. |
(d) | The effect on Net income of unrealized losses after taxes may be mitigated upon realization because certain realized losses may result in current decreases in the amortization of certain DAC. |
(e) | Item count is by CUSIP by subsidiary. |
Excluding Fortitude Re Funds Withheld Assets (dollars in millions) | | | Number of Loans | | | Class | | | Total | | | Percent of Total | |||||||||||||||
| Apartments | | | Offices | | | Retail | | | Industrial | | | Hotel | | | Others | | ||||||||||
At December 31, 2021 | | | | | | | | | | | | | | | | | | | |||||||||
State: | | | | | | | | | | | | | | | | | | | |||||||||
New York | | | 66 | | | $1,857 | | | $3,645 | | | $254 | | | $359 | | | $71 | | | $— | | | $6,186 | | | 23% |
New Jersey | | | 35 | | | 1,782 | | | 22 | | | 344 | | | 201 | | | 8 | | | 22 | | | 2,379 | | | 9 |
California | | | 45 | | | 363 | | | 813 | | | 172 | | | 449 | | | 633 | | | 13 | | | 2,443 | | | 9 |
Texas | | | 38 | | | 458 | | | 811 | | | 150 | | | 158 | | | 143 | | | — | | | 1,720 | | | 6 |
Florida | | | 48 | | | 271 | | | 152 | | | 217 | | | 165 | | | 261 | | | — | | | 1,066 | | | 4 |
Illinois | | | 15 | | | 468 | | | 348 | | | 9 | | | 45 | | | — | | | 21 | | | 891 | | | 3 |
Massachusetts | | | 11 | | | 425 | | | 203 | | | 485 | | | 16 | | | — | | | — | | | 1,129 | | | 4 |
Pennsylvania | | | 19 | | | 78 | | | 105 | | | 337 | | | 66 | | | 25 | | | — | | | 611 | | | 2 |
District of Columbia | | | 7 | | | 344 | | | 53 | | | — | | | — | | | 12 | | | — | | | 409 | | | 1 |
Ohio | | | 18 | | | 83 | | | 7 | | | 88 | | | 160 | | | — | | | — | | | 338 | | | 1 |
Other states | | | 113 | | | 1,323 | | | 433 | | | 656 | | | 394 | | | 305 | | | — | | | 3,111 | | | 11 |
Foreign | | | 56 | | | 3,925 | | | 1,228 | | | 714 | | | 845 | | | 315 | | | 245 | | | 7,272 | | | 27 |
Total* | | | 471 | | | $11,377 | | | $7,820 | | | $3,426 | | | $2,858 | | | $1,773 | | | $301 | | | $27,555 | | | 100% |
Fortitude Re funds withheld assets | | | | | | | | | | | | | | | | | $2,973 | | | ||||||||
Total commercial mortgages | | | | | | | | | | | | | | | | | $30,528 | | | ||||||||
At December 31, 2020 | | | | | | | | | | | | | | | | | | | |||||||||
State: | | | | | | | | | | | | | | | | | | | |||||||||
New York | | | 78 | | | $2,243 | | | $4,200 | | | $257 | | | $329 | | | $72 | | | $— | | | $7,101 | | | 25% |
New Jersey | | | 35 | | | 1,496 | | | 23 | | | 318 | | | 85 | | | 8 | | | 24 | | | 1,954 | | | 7 |
California | | | 49 | | | 375 | | | 839 | | | 178 | | | 438 | | | 643 | | | 32 | | | 2,505 | | | 8 |
Texas | | | 39 | | | 422 | | | 825 | | | 153 | | | 88 | | | 144 | | | — | | | 1,632 | | | 6 |
Florida | | | 59 | | | 247 | | | 153 | | | 298 | | | 167 | | | 217 | | | — | | | 1,082 | | | 4 |
Illinois | | | 15 | | | 425 | | | 304 | | | 10 | | | 18 | | | — | | | 21 | | | 778 | | | 2 |
Massachusetts | | | 12 | | | 426 | | | 169 | | | 497 | | | 16 | | | — | | | — | | | 1,108 | | | 4 |
Pennsylvania | | | 18 | | | 79 | | | 17 | | | 344 | | | 67 | | | 25 | | | — | | | 532 | | | 2 |
District of Columbia | | | 7 | | | 287 | | | 54 | | | — | | | — | | | 12 | | | — | | | 353 | | | 2 |
Ohio | | | 18 | | | 84 | | | 7 | | | 92 | | | 145 | | | — | | | — | | | 328 | | | 2 |
Other states | | | 144 | | | 1,343 | | | 553 | | | 830 | | | 431 | | | 374 | | | — | | | 3,531 | | | 14 |
Foreign | | | 61 | | | 3,698 | | | 1,034 | | | 739 | | | 953 | | | 399 | | | 251 | | | 7,074 | | | 24 |
Total* | | | 535 | | | $11,125 | | | $8,178 | | | $3,716 | | | $2,737 | | | $1,894 | | | $328 | | | $27,978 | | | 100% |
Fortitude Re funds withheld assets | | | | | | | | | | | | | | | | | $3,052 | | | ||||||||
Total commercial mortgages | | | | | | | | | | | | | | | | | $31,030 | | |
* | Does not reflect allowance for credit losses. |
| | Debt Service Coverage Ratios(a) | ||||||||||
(in millions) | | | >1.20X | | | 1.00X - 1.20X | | | <1.00X | | | Total |
December 31, 2021 | | | | | | | | | ||||
Loan-to-Value Ratios(b) | | | | | | | | | ||||
Less than 65% | | | $15,526 | | | $3,081 | | | $1,736 | | | $20,343 |
65% to 75% | | | 4,629 | | | 1,044 | | | 341 | | | 6,014 |
76% to 80% | | | 237 | | | — | | | 52 | | | 289 |
Greater than 80% | | | 758 | | | 45 | | | 106 | | | 909 |
Total commercial mortgages excluding Fortitude Re | | | $21,150 | | | $4,170 | | | $2,235 | | | $27,555 |
Total commercial mortgages including Fortitude Re | | | | | | | | | $2,973 | |||
Total commercial mortgages | | | | | | | | | $30,528 | |||
December 31, 2020 | | | | | | | | | ||||
Loan-to-Value Ratios(b) | | | | | | | | | ||||
Less than 65% | | | $16,312 | | | $1,722 | | | $262 | | | $18,296 |
65% to 75% | | | 6,613 | | | 570 | | | 354 | | | 7,537 |
76% to 80% | | | 451 | | | — | | | — | | | 451 |
Greater than 80% | | | 1,467 | | | 27 | | | 200 | | | 1,694 |
Total commercial mortgages excluding Fortitude Re | | | $24,843 | | | $2,319 | | | $816 | | | $27,978 |
Total commercial mortgages including Fortitude Re | | | | | | | | | $3,052 | |||
Total commercial mortgages | | | | | | | | | $31,030 |
(a) | The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest. Our weighted-average debt service coverage ratio was 1.9X and 2.2X at December 31, 2021 and December 31, 2020, respectively. The debt service coverage ratios have been updated within the last three months. |
(b) | The loan-to-value ratio compares the current unpaid principal balance of the loan to the estimated fair value of the underlying property collateralizing the loan. Our weighted-average loan-to-value ratio was 57% and 60% at December 31, 2021 and December 31, 2020, respectively. The loan-to-value ratios have been updated within the last three to nine months. |
December 31, 2021 (in millions) | | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | Prior | | | Total |
FICO(a): | | | | | | | | | | | | | | | |||||||
780 and greater | | | $1,398 | | | $678 | | | $284 | | | $100 | | | $107 | | | $325 | | | $2,892 |
720 - 779 | | | 1,118 | | | 225 | | | 83 | | | 41 | | | 36 | | | 94 | | | 1,597 |
660 - 719 | | | 44 | | | 39 | | | 20 | | | 11 | | | 13 | | | 33 | | | 160 |
600 - 659 | | | 1 | | | 1 | | | 2 | | | 3 | | | 2 | | | 6 | | | 15 |
Less than 600 | | | — | | | — | | | — | | | 1 | | | 1 | | | 6 | | | 8 |
Total residential mortgages(b)(c) | | | $2,561 | | | $943 | | | $389 | | | $156 | | | $159 | | | $464 | | | $4,672 |
December 31, 2020 (in millions) | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | Prior | | | Total |
FICO(a): | | | | | | | | | | | | | | | |||||||
780 and greater | | | $418 | | | $605 | | | $266 | | | $261 | | | $407 | | | $258 | | | $2,215 |
720 - 779 | | | 396 | | | 333 | | | 99 | | | 101 | | | 133 | | | 80 | | | 1,142 |
660 - 719 | | | 15 | | | 59 | | | 27 | | | 27 | | | 38 | | | 30 | | | 196 |
600 - 659 | | | 1 | | | 5 | | | 6 | | | 4 | | | 3 | | | 6 | | | 25 |
Less than 600 | | | — | | | — | | | 1 | | | 1 | | | 2 | | | 5 | | | 9 |
Total residential mortgages(b)(c) | | | $830 | | | $1,002 | | | $399 | | | $394 | | | $583 | | | $379 | | | $3,587 |
(a) | Fair Isaac Corporation (“FICO”) is the credit quality indicator used to evaluate consumer credit risk for residential mortgage loan borrowers and have been updated within the last three months. |
(b) | The balance for residential mortgage loan under Fortitude Re funds withheld assets is $0. |
(c) | Does not include allowance for credit losses. |
Years Ended December 31, | | | 2021 | | | 2020 | | | 2019 | ||||||||||||||||||
(in millions) | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total |
Sales of fixed maturity securities | | | $103 | | | $647 | | | $750 | | | $(78) | | | $660 | | | $582 | | | $16 | | | $209 | | | $225 |
Other-than-temporary impairments | | | — | | | — | | | — | | | — | | | — | | | — | | | (119) | | | — | | | (119) |
Change in allowance for credit losses on fixed maturity securities | | | 8 | | | 3 | | | 11 | | | (186) | | | 17 | | | (169) | | | — | | | — | | | — |
Change in allowance for credit losses on loans | | | 133 | | | 8 | | | 141 | | | (61) | | | 3 | | | (58) | | | (28) | | | (13) | | | (41) |
Foreign exchange transactions, net of related hedges | | | 305 | | | 20 | | | 325 | | | 89 | | | (5) | | | 84 | | | 264 | | | 10 | | | 274 |
Variable annuity embedded derivatives, net of related hedges(a) | | | 94 | | | — | | | 94 | | | 162 | | | — | | | 162 | | | (333) | | | — | | | (333) |
Index annuity and indexed life embedded derivatives, net of related hedges | | | 11 | | | — | | | 11 | | | (766) | | | — | | | (766) | | | (348) | | | — | | | (348) |
All other derivatives and hedge accounting | | | (6) | | | 9 | | | 3 | | | (97) | | | 423 | | | 326 | | | (44) | | | 99 | | | 55 |
Other(b) | | | 970 | | | 237 | | | 1,207 | | | 172 | | | (96) | | | 76 | | | 433 | | | (43) | | | 390 |
Net realized gains (losses) – excluding Fortitude Re funds withheld embedded derivative | | | 1,618 | | | 924 | | | 2,542 | | | (765) | | | 1,002 | | | 237 | | | (159) | | | 262 | | | 103 |
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative | | | — | | | (687) | | | (687) | | | — | | | (3,978) | | | (3,978) | | | — | | | (5,167) | | | (5,167) |
Net realized gains (losses) | | | $1,618 | | | $237 | | | $1,855 | | | $(765) | | | $(2,976) | | | $(3,741) | | | $(159) | | | $(4,905) | | | $(5,064) |
(a) | The 2020 and 2019 changes in Variable annuity embedded derivatives, net of related hedges was revised from $89 million and $(340) million to $162 million and $(333) million, respectively. The 2020 and 2019 |
(b) | 2021 primarily includes gains from the sale of global real estate investments of $969 million, and gains from the sale of certain affordable housing partnerships of $208 million for net realized gains and losses excluding Fortitude Re funds withheld assets. In 2019, includes $300 million as a result of sales in investment real estate properties for net realized gains and losses excluding Fortitude Re funds withheld assets. |
At December 31, | | | 2021 | | | 2020 | ||||||||||||
(in millions) | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total |
Alternative investments(a)(b) | | | $5,921 | | | $1,606 | | | $7,527 | | | $4,939 | | | $1,168 | | | $6,107 |
Investment real estate(c) | | | 2,148 | | | 201 | | | 2,349 | | | 6,550 | | | 358 | | | 6,908 |
All other investments(d) | | | 691 | | | — | | | 691 | | | 380 | | | — | | | 380 |
Total | | | $8,760 | | | $1,807 | | | $10,567 | | | $11,869 | | | $1,526 | | | $13,395 |
(a) | At December 31, 2021, included hedge funds of $1.0 billion and private equity funds of $6.5 billion. At December 31, 2020, included hedge funds of $0.8 billion, private equity funds of $5.0 billion, and affordable housing partnerships of $257 million. |
(b) | At December 31, 2021, 73% of our hedge fund portfolio is available for redemption in 2022. The remaining 27% will be available for redemption between 2023 and 2028. |
(c) | Net of accumulated depreciation of $493 million and $555 million at December 31, 2021 and December 31, 2020, respectively, excluding affordable housing partnerships. The accumulated depreciation related to the investment real estate held by affordable housing partnerships is $123 million and $595 million in December 31, 2021 and December 31, 2020, respectively. |
(d) | Includes Corebridge’s 3.5% ownership interest in Fortitude Holdings which is recorded using the measurement alternative for equity securities and is carried at cost, which was $100 million as of December 31, 2021. |
| | December 31, 2021 | | | December 31, 2020 | |||||||||||||||||||
| | Gross Derivative Assets | | | Gross Derivative Liabilities | | | Gross Derivative Assets | | | Gross Derivative Liabilities | |||||||||||||
(in millions) | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value |
Derivatives designated as hedging instruments:(a) | | | | | | | | | | | | | | | | | ||||||||
Interest rate contracts | | | $352 | | | $274 | | | $980 | | | $14 | | | $902 | | | $302 | | | $441 | | | $9 |
Foreign exchange contracts | | | 3,705 | | | 244 | | | 2,518 | | | 49 | | | 1,126 | | | 92 | | | 3,753 | | | 226 |
Derivatives not designated as hedging instruments:(a) | | | | | | | | | | | | | | | | | ||||||||
Interest rate contracts | | | 21,811 | | | 1,078 | | | 21,129 | | | 1,377 | | | 32,500 | | | 973 | | | 21,923 | | | 1,318 |
Foreign exchange contracts | | | 3,883 | | | 405 | | | 5,112 | | | 307 | | | 3,153 | | | 379 | | | 5,596 | | | 429 |
Equity contracts | | | 60,192 | | | 4,670 | | | 38,734 | | | 4,071 | | | 56,267 | | | 6,718 | | | 40,598 | | | 5,837 |
Credit contracts | | | — | | | 1 | | | — | | | — | | | — | | | — | | | — | | | — |
Other contracts(b) | | | 43,839 | | | 13 | | | 133 | | | — | | | 43,461 | | | 14 | | | 54 | | | 6 |
Total derivatives, excluding Fortitude Re funds withheld | | | $133,782 | | | $6,685 | | | $68,606 | | | $5,818 | | | $137,409 | | | $8,478 | | | $72,365 | | | $7,825 |
Total derivatives, Fortitude Re funds withheld | | | $8,602 | | | $582 | | | $2,932 | | | $195 | | | $9,115 | | | $533 | | | $2,858 | | | $171 |
Total derivatives, gross | | | $142,384 | | | $7,267 | | | $71,538 | | | $6,013 | | | $146,524 | | | $9,011 | | | $75,223 | | | $7,996 |
Counterparty netting(c) | | | | | (5,785) | | | | | (5,785) | | | | | (7,723) | | | | | (7,723) | ||||
Cash collateral(d) | | | | | (798) | | | | | (37) | | | | | (533) | | | | | (28) | ||||
Total derivatives on Consolidated Balance Sheets (e) | | | | | $684 | | | | | $191 | | | | | $755 | | | | | $245 |
(a) | Fair value amounts are shown before the effects of counterparty netting adjustments and offsetting cash collateral. |
(b) | Consists primarily of SVWs and contracts with multiple underlying exposures. |
(c) | Represents netting of derivative exposures covered by a qualifying master netting agreement. |
(d) | Represents cash collateral posted and received that is eligible for netting. |
(e) | Freestanding derivatives only, excludes embedded derivatives. Derivative instrument assets and liabilities are recorded in Other assets and Other liabilities, respectively. Fair value of assets related to bifurcated embedded derivatives was zero at both December 31, 2021 and December 31, 2020. Fair value of liabilities related to bifurcated embedded derivatives was $17.7 billion and $17.8 billion, respectively, at December 31, 2021 and December 31, 2020. A bifurcated embedded derivative is generally presented with the host contract in the Consolidated Balance Sheets. Embedded derivatives are primarily related to guarantee features in variable annuity products, which include equity and interest rate components, and the funds withheld arrangement with Fortitude Re. |
• | the economic hedge target includes 100% of rider fees in present value calculations; the GAAP valuation reflects only those fees attributed to the embedded derivative such that the initial value at contract issue equals zero; |
• | the economic hedge target uses best estimate actuarial assumptions and excludes explicit risk margins used for GAAP valuation, such as margins for policyholder behavior, mortality and volatility; and |
• | the economic hedge target excludes the non-performance, or “own credit” risk adjustment used in the GAAP valuation, which reflects a market participant’s view of our claims-paying ability by |
• | basis risk due to the variance between expected and actual fund returns, which may be either positive or negative; |
• | realized volatility versus implied volatility; |
• | actual versus expected changes in the hedge target driven by assumptions not subject to hedging, particularly policyholder behavior; and |
• | risk exposures that we have elected not to explicitly or fully hedge. |
| | Years Ended December 31, | ||||
(in millions) | | | 2021 | | | 2020 |
Reconciliation of embedded derivatives and economic hedge target: | | | | | ||
Embedded derivative liability | | | $2,472 | | | $3,702 |
Exclude non-performance risk adjustment | | | (2,508) | | | (2,958) |
Embedded derivative liability, excluding NPA | | | 4,980 | | | 6,660 |
Adjustments for risk margins and differences in valuation | | | (2,172) | | | 2,632) |
Economic hedge target liability | | | $2,808 | | | $4,028 |
• | changes in the fair value of interest rate derivative contracts, which included swaps, swaptions and futures, resulted in losses driven by higher interest rates in 2021 compared to gains driven by lower interest rates in 2020 and 2019; |
• | changes in the fair value of equity derivative contracts, which included futures and options, resulted in losses in 2021 and 2020 which varied based on the relative change in equity market returns in the respective periods; and |
• | changes in the fair value of fixed maturity securities, primarily corporate bonds, are used as a capital-efficient way to economically hedge interest rate and credit spread-related risk. The change in the fair value of the corporate bond hedging program in 2021 reflected losses due to higher interest rates. The change in the fair value of the corporate bond hedging program in 2020 reflected gains due to decreases in interest rates and tightening credit spreads. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $7,241 | | | $7,939 | | | $9,175 |
Initial allowance upon CECL adoption | | | — | | | 15 | | | — |
Capitalizations | | | 1,000 | | | 889 | | | 1,168 |
Amortization expense: | | | | | | | |||
Update of assumptions included in adjusted pre-tax income | | | (143) | | | 224 | | | 194 |
Related to realized gains and losses | | | (59) | | | 4 | | | 4 |
All other operating amortization | | | (844) | | | (760) | | | (857) |
Increase (decrease) in DAC due to foreign exchange | | | (6) | | | 17 | | | 14 |
Change related to unrealized depreciation (appreciation) of investments | | | 760 | | | (1,085) | | | (1,746) |
Other | | | — | | | (2) | | | (13) |
Balance, end of year(a) | | | $7,949 | | | $7,241 | | | $7,939 |
(a) | DAC balance excluding the amount related to unrealized depreciation (appreciation) of investments was $10.3 billion, $10.4 billion and $10.0 billion at December 31, 2021, 2020 and 2019, respectively. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $122 | | | $130 | | | $146 |
Initial allowance upon CECL adoption | | | — | | | — | | | — |
Amortization expense: | | | | | | | |||
Update of assumptions included in adjusted pre-tax income | | | — | | | 1 | | | — |
Related to realized gains and losses | | | — | | | — | | | (1) |
All other operating amortization | | | (11) | | | (12) | | | (14) |
Increase (decrease) in VOBA due to foreign exchange | | | (1) | | | 3 | | | 3 |
Change related to unrealized depreciation (appreciation) of investments | | | (1) | | | 2 | | | (4) |
Other | | | — | | | (2) | | | — |
Balance, end of year(a) | | | $109 | | | $122 | | | $130 |
(a) | VOBA balance excluding the amount related to unrealized depreciation (appreciation) of investments was $111 million, $147 million and $157 million at December 31, 2021, 2020, and 2019, respectively. |
• | Ultimate projected yields on most of our invested assets were lowered on life and annuity deposits. Life deposit projected yields decreased up to 42 basis points while annuity insurance deposits saw decreases of up to 52 basis points. Projected yields are graded from a weighted-average net GAAP book yield of existing assets supporting the business based on the value of the assets to a weighted-average yield based on the duration of the assets excluding assets that mature during the grading period. The grading period is three years for deferred annuity products and five years for life insurance products due to deferred annuities having a shorter duration than life products. Projected yields are held constant after the grading period. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Premiums | | | $(41) | | | $— | | | $— |
Policy fees | | | (74) | | | (106) | | | (24) |
Interest credited to policyholder account balances | | | (54) | | | (6) | | | 19 |
Amortization of deferred policy acquisition costs | | | (143) | | | 225 | | | 194 |
Policyholder benefits | | | 86 | | | (246) | | | (147) |
Increase (decrease) in adjusted pre-tax operating income | | | (226) | | | (133) | | | 42 |
Change in DAC related to net realized gains (losses) | | | 32 | | | (44) | | | (17) |
Net realized gains | | | 50 | | | 142 | | | 180 |
Increase (decrease) in pre-tax income | | | $(144) | | | $(35) | | | $205 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Individual Retirement: | | | | | | | |||
Fixed Annuities | | | $(267) | | | $(77) | | | $82 |
Variable Annuities | | | 7 | | | 13 | | | (5) |
Fixed Index Annuities | | | (60) | | | (30) | | | (140) |
Total Individual Retirement | | | (320) | | | (94) | | | (63) |
Group Retirement | | | (5) | | | 68 | | | (17) |
Life Insurance | | | 99 | | | (108) | | | 122 |
Institutional Markets | | | — | | | 1 | | | — |
Total increase (decrease) in adjusted pre-tax operating income from update of assumptions* | | | $(226) | | | $(133) | | | $42 |
* | Liabilities ceded to Fortitude Re are reported in Corporate and Other. There was no impact to adjusted pre-tax operating income due to the annual update of actuarial assumptions as these liabilities are 100 percent ceded. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Cash and short-term investments | | | $1,016 | | | $1,699 | | | $1,456 |
Total Corebridge Hold Cos. Liquidity | | | 1,016 | | | 1,699 | | | 1,456 |
Available capacity under uncommitted borrowing facilities with AIG, Inc. | | | 1,025 | | | 1,075 | | | 1,075 |
Total Corebridge Hold Cos. liquidity sources | | | $2,041 | | | $2,774 | | | $2,531 |
(a) | For information on planned credit facilities, see “Recapitalization.” |
• | $8.3 billion, for which Corebridge issued a promissory note to AIG, Inc. in the amount of $8.3 billion, that will be repaid in cash using proceeds from anticipated future debt issuances in advance of the initial public offering of Corebridge, which may involve a draw down on the Delayed Draw Term Loan facilities. For additional information on the $8.3 billion note repayment, see “Recapitalization”. |
• | $3.8 billion in connection with the sale of Corebridge’s affordable housing assets. |
• | $38 million in AIG, Inc. common stock. |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Life Fleet | | | 447% | | | 433% | | | 402% |
AGC | | | 380% | | | 372% | | | 351% |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Subsidiary dividends paid | | | $1,564 | | | $540 | | | $1,535 |
Less: Non-recurring dividends | | | (295) | | | 600 | | | (400) |
Tax sharing payments related to utilization of tax attributes. | | | 902 | | | 1,026 | | | 954 |
Normalized distributions | | | $2,171 | | | $2,166 | | | $2,089 |
December 31, 2021 (in millions) | | | Total Payments | | | Payments due by Period | ||||||
| 2022 | | | 2023 - 2024 | | | Thereafter | |||||
Affiliated senior promissory note with AIG, Inc.(a) | | | $8,300 | | | $8,300 | | | $— | | | $— |
Interest payments on short-term debt(b) | | | 99 | | | 99 | | | — | | | — |
Insurance and investment contract liabilities | | | 293,624 | | | 16,435 | | | 36,536 | | | 240,653 |
Long-term debt(b) | | | 427 | | | — | | | — | | | 427 |
Interest payments on long-term debt | | | 471 | | | 33 | | | 66 | | | 372 |
Total | | | $302,921 | | | $24,867 | | | $36,602 | | | $241,452 |
(a) | For information on the $8.3 billion promissory note issued to AIG in November 2021, see Note 21 to our audited consolidated financial statements. |
(b) | For information on planned facilities, see “Recapitalization”. |
(in millions) | | | Maturity Date(s) | | | Balance at December 31, 2020 | | | Issuances | | | Maturities and Repayments | | | Other Changes | | | Balance at December 31, 2021 |
Short-term debt issued by Corebridge: | | | | | | | | | | | | | ||||||
Affiliated senior promissory note with AIG, Inc. | | | 2022 | | | $— | | | $8,300 | | | $— | | | $17(c) | | | $8,317 |
Affiliated note with AIG, Inc. | | | — | | | — | | | 345 | | | (249) | | | (96)(b) | | | — |
Total short-term debt | | | | | $— | | | $8,645 | | | $(249) | | | $(79) | | | $8,317 | |
Debt issued by Corebridge and Intermediate Hold Cos.: | | | | | | | | | | | | | ||||||
Affiliated note with AIG Europe S.A. | | | — | | | $9 | | | $— | | | $(9) | | | $— | | | $— |
Affiliated note with Lexington Insurance Company | | | — | | | 253 | | | — | | | (253) | | | — | | | — |
AIGLH notes and bonds payable | | | 2025-2029 | | | 282 | | | — | | | (82)(a) | | | — | | | 200 |
AIGLH junior subordinated debt | | | 2030-2046 | | | 361 | | | — | | | (134)(a) | | | — | | | 227 |
Total long-term debt | | | | | 905 | | | — | | | (478) | | | — | | | 427 | |
Total Corebridge and Intermediate Hold Cos. Debt(d) | | | | | $905 | | | $8,645 | | | $(727) | | | $(79) | | | $8,744 |
(a) | During the year ended 2021, $216 million of aggregate principal amount of AIGLH notes and bonds payable and AIGLH junior subordinated debt, were repurchased through cash tender offers for an aggregate purchase price of $312 million. |
(b) | During the year 2021, AIG, Inc. forgave Corebridge $96 million of draw downs under affiliated note with AIG, Inc. |
(c) | Represents accrued interest which has been paid-in-kind and thus added to the total outstanding balance. |
(d) | For information on planned facilities, see “Recapitalization.” Subsequent to December 31, 2021, we entered into a delayed draw term loan, for further information see “Recapitalization” and Note 22 to our audited consolidated financial statements. |
(in millions) | | | Balance at December 31, 2020 | | | Issuances | | | Maturities and Repayments | | | Effect of Foreign Exchange | | | Other, Changes | | | Balance at December 31, 2021 |
Debt of consolidated investment entities –not guaranteed by Corebridge(a)(b) | | | $10,341 | | | $4,683 | | | $(5,819)(c) | | | $(21) | | | $(2,248)(d) | | | $6,936 |
(a) | At December 31, 2021, includes debt of consolidated investment entities related to real estate investments of $1.7 billion and other securitization vehicles of $5.2 billion. |
(b) | In relation of the debt of consolidated investment entities (VIEs), not guaranteed by Corebridge, creditors or beneficial interest holders of VIEs generally only have recourse to the assets and cash flows of the VIEs and do not have recourse to us except in limited circumstances when we have provided a guarantee to the VIE’s interest holders. |
(c) | Includes reduction of debt of consolidated investment entities in relation to the wind down of six |
(d) | Includes the effect of the sale of Affordable Housing debt. |
| | Senior Long-Term Debt | |||||||
| | Moody’s(a) | | | S&P(b) | | | Fitch(c) | |
| | Baa2 (Stable) | | | BBB+ (Stable) | | | BBB+ (Stable) |
(a) | Moody’s appends numerical modifiers 1, 2 and 3 to the generic rating categories to show relative position within the rating categories. |
(b) | S&P ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. |
(c) | Fitch ratings may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories. |
| | A.M. Best | | | S&P | | | Fitch | | | Moody’s | |
American General Life Insurance Company | | | A | | | A+ | | | A+ | | | A2 |
The Variable Annuity Life Insurance Company | | | A | | | A+ | | | A+ | | | A2 |
United States Life Insurance Company in the City of New York | | | A | | | A+ | | | A+ | | | A2 |
December 31, 2021 (in millions) | | | Total Amounts Committed | | | Amount of Commitment Expiring | ||||||
| 2022 | | | 2023 -2024 | | | Thereafter | |||||
Commitments: | | | | | | | | | ||||
Investment commitments(a) | | | 5,877 | | | 2,937 | | | 2,256 | | | 684 |
Commitments to extend credit | | | 4,459 | | | 1,449 | | | 2,301 | | | 709 |
Letters of credit | | | 2 | | | 2 | | | — | | | — |
Total(b) | | | $10,338 | | | $4,388 | | | $4,557 | | | $1,393 |
(a) | Includes commitments to invest in private equity funds, hedge funds and other funds and commitments to purchase and develop real estate in the United States and abroad. The commitments to invest in private equity funds, hedge funds and other funds are called at the discretion of each fund, as needed for funding new investments or expenses of the fund. The expiration of these commitments is estimated in the table above based on the expected life cycle of the related fund, consistent with past trends of requirements for funding. Investors under these commitments are primarily insurance and real estate subsidiaries. |
(b) | We have no guarantees related to liquid facilities or indebtedness. |
• | fair value measurements of certain financial assets and liabilities; |
• | valuation of liabilities for guaranteed benefit features of variable annuity products, fixed annuity and fixed index annuity products, including the valuation of embedded derivatives; |
• | estimated gross profits to value deferred acquisition costs and unearned revenue for investment-oriented products, such as universal life insurance, variable and fixed annuities, and fixed index annuities; |
• | valuation of future policy benefit liabilities and timing and extent of loss recognition; |
• | valuation of embedded derivatives for fixed index annuity and life products; |
• | reinsurance assets, including the allowance for credit losses; |
• | allowances for credit losses primarily on loans and available for sale fixed maturity securities, |
• | goodwill impairment; |
• | liability for legal contingencies; and |
• | income tax assets and liabilities, including recoverability of our net deferred tax asset and the predictability of future tax operating profitability of the character necessary to realize the net deferred tax asset. |
| | 2021 | | | 2020 | |||||||
At December 31, (in millions) | | | Fair Value | | | Percent of Total | | | Fair Value | | | Percent of Total |
Fair value based on external sources(a) | | | $180,841 | | | 90.0% | | | $180,399 | | | 90.5% |
Fair value based on internal sources | | | 20,039 | | | 10.0 | | | 18,928 | | | 9.5 |
Total fixed maturity and equity securities(b) | | | $200,880 | | | 100.0% | | | $199,327 | | | 100.0% |
(a) | Includes $18.8 billion and $16.4 billion as of December 31, 2021 and December 31, 2020, respectively, for which the primary source is broker quotes. |
(b) | Includes available for sale and other securities. |
| | 2021 | | | 2020 | |||||||
Years Ended December 31, (in millions) | | | Amount | | | Percent of Total | | | Amount | | | Percent of Total |
Assets | | | $25,420 | | | 6.1% | | | $24,001 | | | 5.9% |
Liabilities | | | 17,695 | | | 4.6 | | | 18,792 | | | 5.1 |
Guaranteed Benefit Feature | | | Reserving Methodology & Key Assumptions | |||
GMDB and Fixed and certain Fixed Index Annuity GMWB | | | We determine the GMDB liability at each balance sheet date by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. For certain fixed and fixed index annuity products, we determine the GMWB liability at each balance sheet date by estimating the expected withdrawal benefits once the projected account balance has been exhausted ratably over the accumulation period based on total expected assessments. These GMWB features are deemed to not be embedded derivatives as the GMWB feature is determined to be clearly and closely related to the host contract. | |||
| | | | |||
| | The present value of the total expected excess payments (e.g., payments in excess of account value) over the life of contract divided by the present value of total expected assessments is referred to as the benefit ratio. The magnitude and direction of the change in reserves may vary over time based on the emergence of the benefit ratio and the level of assessments. For additional information on how we reserve for variable and fixed index annuity products with guaranteed benefit features, see Note 13 to our audited consolidated financial statements. | ||||
| | | |
Guaranteed Benefit Feature | | | Reserving Methodology & Key Assumptions | |||
| | Key assumptions and projections include: | ||||
| | | | |||
| | • | | | interest credited that varies by year of issuance and products; | |
| | | | |||
| | • | | | actuarially determined assumptions for mortality rates that are based upon industry and our historical experience modified to allow for variations in policy features and experience anomalies; | |
| | | | |||
| | • | | | actuarially determined assumptions for lapse rates that are based upon industry and our historical experience modified to allow for variations in policy features and experience anomalies; | |
| | | | |||
| | • | | | investment returns, based on stochastically generated scenarios; and | |
| | | | |||
| | • | | | asset returns that include a reversion to the mean methodology, similar to that applied for DAC. | |
| | | | |||
| | In applying separate account asset growth assumptions for the Variable Annuity GMDB liability, we use a reversion to the mean methodology, the same as that applied to DAC. For the fixed index annuity GMWB liability, policyholder funds are projected assuming growth equal to current Option Values for the current crediting period followed by Option Budgets for all subsequent crediting periods. For the fixed annuity GMWB liability, policyholder fund growth projected assuming credited rates are expected to be maintained at a target pricing spread, subject to guaranteed minimums. | ||||
| | | | |||
| | For a description of this methodology, see “—Estimated Gross Profits to Value Deferred Acquisition Costs and Unearned Revenue for Investment-Oriented Products.” | ||||
| | | | |||
Variable Annuity and certain Fixed Index Annuity GMWB | | | GMWB living benefits on variable annuities and GMWB living benefits linked to equity indices on fixed index annuities are embedded derivatives that are required to be bifurcated from the host contract and carried at fair value with changes in the fair value of the liabilities recorded in realized gains (losses). The fair value of these embedded derivatives is based on assumptions that a market participant would use in valuing these embedded derivatives. | |||
| | | | |||
| | For additional information on how we reserve for variable and fixed index annuity products with guaranteed benefit features, see Note 13 to our audited consolidated financial statements, and for information on fair value measurement of these embedded derivatives, including how we incorporate our own non-performance risk, see Note 4 to our audited consolidated financial statements. | ||||
| | | | |||
| | The fair value of the embedded derivatives, which are Level 3 liabilities, is based on a risk-neutral framework and incorporates actuarial and capital market assumptions related to projected cash flows over the expected lives of the contracts. | ||||
| | | | |||
| | Key assumptions include: | ||||
| | | | |||
| | • | | | interest rates; | |
| | | | |||
| | • | | | equity market returns; | |
| | | | |||
| | • | | | market volatility; | |
| | | | |||
| | • | | | credit spreads; | |
| | | |
Guaranteed Benefit Feature | | | Reserving Methodology & Key Assumptions | |||
| | • | | | equity / interest rate correlation; | |
| | | | |||
| | • | | | policyholder behavior, including mortality, lapses, withdrawals and benefit utilization. Estimates of future policyholder behavior are subjective and based primarily on our historical experience; | |
| | | | |||
| | • | | | in applying asset growth assumptions for the valuation of GMWBs, we use market-consistent assumptions calibrated to observable interest rate and equity option prices; and | |
| | | | |||
| | • | | | allocation of fees between the embedded derivative and host contract. |
December 31, 2021 (in millions) | | | DAC/DSI Asset | | | Other Reserves Related to Guaranteed Benefits | | | Unearned Revenue Reserve | | | Embedded Derivatives Related to Guaranteed Benefits | | | Pre-Tax Income | | | Adjusted Pre-Tax Operating Income |
Assumptions: | | | | | | | | | | | | | ||||||
Net Investment Spread | | | | | | | | | | | | | ||||||
Effect of an increase by 10 basis points | | | $140 | | | $(49) | | | $(6) | | | $(154) | | | $349 | | | $195 |
Effect of a decrease by 10 basis points | | | (150) | | | 49 | | | 1 | | | 158 | | | (358) | | | (200) |
Equity Return(a) | | | | | | | | | | | | | ||||||
Effect of an increase by 1% | | | 109 | | | (29) | | | — | | | (60) | | | 198 | | | — |
Effect of a decrease by 1% | | | (105) | | | 37 | | | — | | | 62 | | | (204) | | | — |
Volatility(b) | | | | | | | | | | | | | ||||||
Effect of an increase by 1% | | | (3) | | | 25 | | | — | | | (32) | | | 4 | | | — |
Effect of a decrease by 1% | | | 3 | | | (24) | | | — | | | 37 | | | (10) | | | — |
Interest Rate(c) | | | | | | | | | | | | | ||||||
Effect of an increase by 1% | | | — | | | — | | | — | | | (2,550) | | | 2,550 | | | — |
Effect of a decrease by 1% | | | — | | | — | | | — | | | 3,407 | | | (3,407) | | | — |
Mortality | | | | | | | | | | | | | ||||||
Effect of an increase by 1% | | | (10) | | | 41 | | | — | | | (54) | | | 3 | | | (51) |
Effect of a decrease by 1% | | | 10 | | | (41) | | | (1) | | | 54 | | | (2) | | | 52 |
Lapse | | | | | | | | | | | | | ||||||
Effect of an increase by 10% | | | (123) | | | (105) | | | (28) | | | (94) | | | 104 | | | 10 |
Effect of a decrease by 10% | | | 126 | | | 109 | | | 24 | | | 97 | | | (104) | | | (7) |
(a) | Represents the net impact of a 1% increase or decrease in long-term equity returns for GMDB reserves and net impact of a 1% increase or decrease in the S&P 500 index on the value of the GMWB embedded derivative. |
(b) | Represents the net impact of a 1% increase or decrease in equity volatility. |
(c) | Represents the net impact of 1% parallel shift in the yield curve on the value of the GMWB embedded derivative. Does not represent interest rate spread compression on investment-oriented products. |
• | to determine investment returns used in loss recognition tests, we project future cash flows on the assets supporting the liabilities. The duration of these assets is generally comparable to the duration of the liabilities and such assets are primarily comprised of a diversified portfolio of high to medium quality fixed maturity securities, and may also include, to a lesser extent, alternative investments. Our projections include a reasonable allowance for investment expenses and expected credit losses over the projection horizon. A critical assumption in the projection of expected investment income is the assumed net rate of investment return at which excess cash flows are to be reinvested; |
• | for mortality assumptions, base future assumptions take into account industry and our historical experience, as well as expected mortality changes in the future. The latter judgment is based on a combination of historical mortality trends and industry observations, public health and demography specialists that were consulted by our actuaries and published industry information; and |
• | for surrender rates, key judgments involve the correlation between expected increases/decreases in interest rates and increases/decreases in surrender rates. To support this judgment, we compare crediting rates on our products to expected rates on competing products under different interest rate scenarios. |
• | paid and unpaid amounts recoverable; |
• | whether the balance is in dispute or subject to legal collection; |
• | the relative financial health of the reinsurer as determined by the Obligor Risk Ratings (“ORRs”) we assign to each reinsurer based upon our financial reviews; reinsurers that are financially troubled (i.e., in run-off, have voluntarily or involuntarily been placed in receivership, are insolvent, are in the process of liquidation or otherwise subject to formal or informal regulatory restriction) are assigned ORRs that are expected to generate significant allowance; and |
• | whether collateral and collateral arrangements exist. |
• | Product design – Product design is the first step in managing insurance liability exposure to market risks. |
• | Asset/liability management – We manage assets using an approach that is liability driven. Asset portfolios are managed to target durations based on liability characteristics and the investment objectives of that portfolio within defined ranges. Where liability cashflows exceed the maturity of available assets, we may support such liabilities with derivatives, interest rate curve mismatch strategies or equity and alternative investments. |
• | Hedging – Our hedging strategies include the use of derivatives to offset certain changes in the economic value of embedded derivatives associated with the variable annuity, fixed index annuity and index universal life liabilities, within established thresholds. These hedging programs are designed to provide additional protection against large and consolidated movements in levels of interest rates, equity prices, credit spreads and market volatility under multiple scenarios. |
• | Currency matching – We manage our foreign currency exchange rate exposures within our risk tolerance levels. In general, investments backing specific liabilities are currency matched. This is achieved through investments in currency matching assets or the use of derivatives. |
• | Management of portfolio concentration risk – We perform regular monitoring and management of key rate, foreign exchange, equity prices and other risk concentrations to support efforts to improve portfolio diversification to mitigate exposures to individual markets and sources of risk. |
At December 31, (dollars in millions) | | | Balance Sheet Exposure | | | Economic Effect | | | Economic Effect | |||||||||
| | 2021 | | | 2020 | | | 2021 | | | 2020 | | | 2021 | | | 2020 | |
Sensitivity factor | | | | | | | 100 bps parallel increase in all yield curves | | | 100 bps parallel decrease in all yield curves | ||||||||
Interest rate sensitive assets: | | | | | | | | | | | | | ||||||
Fixed maturity securities(b) | | | $171,283 | | | $167,095 | | | $(14,144) | | | $(13,184) | | | $16,778 | | | $15,660 |
Mortgage and other loans receivable(b)(c) | | | 34,032 | | | 31,857 | | | (1,757) | | | (1,728) | | | 1,825 | | | 2,014 |
Derivatives: | | | | | | | | | | | | | ||||||
Interest rate contracts | | | 1,253 | | | 994 | | | (1,882) | | | (2,198) | | | 3,402 | | | 3,538 |
Total interest rate sensitive assets | | | $206,568(b) | | | $199,946(b) | | | $(17,783) | | | $(17,110) | | | $22,005 | | | $21,212 |
Interest rate sensitive liabilities: | | | | | | | | | | | | | ||||||
Policyholder contract deposits: | | | | | | | | | | | | | ||||||
Investment-type contracts(c) | | | $(130,643) | | | $(128,204) | | | $10,375 | | | $10,857 | | | $(13,552) | | | $(14,078) |
Variable annuity and other embedded derivatives | | | (9,736) | | | (9,797) | | | 2,550 | | | 2,675 | | | (3,407) | | | (3,469) |
Long-term debt(c) | | | (8,744) | | | (643) | | | 117 | | | 75 | | | (125) | | | (86) |
Total interest rate sensitive liabilities | | | $(149,123) | | | $(138,644) | | | $13,042 | | | $13,607 | | | $(17,084) | | | $(17,633) |
Sensitivity factor: | | | 20% decline in stock prices | | | 20% increase in stock prices | ||||||||||||
Derivatives: | | | | | | | | | | | | | ||||||
Equity contracts | | | $599 | | | $884 | | | $542 | | | $440 | | | $447 | | | $265 |
Equity and alternative investments: | | | | | | | | | | | | | ||||||
Common equity | | | 231 | | | 596 | | | (46) | | | (119) | | | 46 | | | 119 |
Total derivatives and equity investments | | | $830 | | | $1,480 | | | $496 | | | $321 | | | $493 | | | $384 |
Policyholder contract deposits: | | | | | | | | | | | | | ||||||
Variable annuity and other embedded derivatives(d) | | | $(9,736) | | | $(9,797) | | | $(269) | | | $(59) | | | $(58) | | | $5 |
Total liability | | | $(9,736) | | | $(9,797) | | | $(269) | | | $(59) | | | $(58) | | | $5 |
(a) | At December 31, 2021, the analysis covers $206.6 billion of $241.3 billion interest rate sensitive assets. As indicated above, excluded were $28.7 billion and $3.8 billion of fixed maturity securities and loans, respectively, supporting the Fortitude Re funds withheld arrangements. In addition, $2.2 billion of loans and $0.9 billion of assets across various asset categories were excluded due to modeling limitations. At December 31, 2020, the analysis covers $200.0 billion of $238.0 billion interest rate sensitive assets. As indicated above, excluded were $30.6 billion and $3.9 billion of fixed maturity securities and loans, respectively, supporting the Fortitude Re funds withheld arrangements. In addition, $3.3 billion of loans and $1.0 billion of assets across various asset categories were excluded due to modeling limitations. |
(b) | The 2020 fixed maturity securities and mortgage and other loan receivables balances were revised. These revisions have no impact on Corebridge’s consolidated financial statements and are not considered material to the financial statements. |
(c) | The economic effect is the difference between the estimated fair value and the effect of a 100 bps parallel increase or decrease in all yield curves on the estimated fair value. The estimated fair values for Mortgage and other loans receivable, Policyholder contract deposits (Investment-type contracts), and Short-term and long-term debt were $38.9 billion, $143.1 billion and $8.9 billion at December 31, 2021, respectively. The estimated fair values for Mortgage and other loans receivable, Policyholder contract deposits (Investment-type contracts) and Short term and long-term debt were $37.7 billion, $144.6 billion and $0.9 billion at December 31, 2020, respectively. |
(d) | The balance sheet exposures for derivatives and variable annuity and other embedded derivatives are also reflected under “Interest rate sensitive assets” and “interest rate sensitive liabilities” above and are not additive. |
• | our scaled platform and position as a leading life and annuity company across a broad range of products, managing or administering $410.9 billion in client assets as of December 31, 2021; |
• | our four businesses, which provide a diversified and attractive mix of fee income, spread income and underwriting margin; |
• | our broad distribution platform, which gives us access to end customers, employers, retirement plan sponsors, banks, broker-dealers, general agencies, independent marketing organizations and independent insurance agents; |
• | our proven expertise in product design, which positions us to optimize risk-adjusted returns as we grow our business; |
• | our strategic partnership with Blackstone, which we believe will allow us to further grow both our retail and institutional product lines, and enhance risk-adjusted returns; |
• | our high-quality liability profile, supported by our strong balance sheet and disciplined approach to risk management, which has limited our exposure to product features and portfolios with less attractive risk-adjusted returns; |
• | our ability to deliver consistent cash flows and an attractive return for our stockholders; and |
• | our strong and experienced senior management team. |
• | Individual Retirement — We are a leading provider in the over $255 billion individual annuity market across a range of product types, including fixed, fixed index and variable annuities, with $13.7 billion in premiums and deposits in 2021. We offer a variety of optional benefits within these products, including lifetime income guarantees and death benefits. Our broad and scaled product offerings and operating platform have allowed our company to rank in the top two in total individual annuity sales in each of the last nine years, and we are the only top 10 annuity provider with a balanced mix of products across all major annuity categories according to LIMRA. Our strong distribution relationships and broad multi-product offerings allow us to quickly adapt to respond to shifting customer needs and economic and competitive dynamics, targeting areas where we see the greatest opportunity for risk-adjusted returns. We are well-positioned for growth due to demographic trends in the U.S. retirement market, supported by our strong platform. Our Individual Retirement business is the largest contributor to our earnings, historically generating consistent spread and fee income. |
• | Group Retirement — We are a leading provider of retirement plans and services to employees of tax-exempt and public sector organizations within the K-12, higher education, healthcare, government and other tax-exempt markets, having ranked third in K-12 schools, fourth in higher education institutions and fifth in healthcare institutions by total assets as of June 30, 2021. According to Cerulli Associates, the size of the not-for-profit defined contribution retirement plan market, excluding the Federal Thrift Savings Plan, was $1.9 trillion in 2020. We work with approximately 1.7 million individuals as of December 31, 2021 through our in-plan products and services and over 300,000 individuals through our out-of-plan products and services. Our out-of-plan capabilities include proprietary and non-proprietary annuities, financial planning, brokerage and advisory services. We offer financial planning advice to employees participating in retirement plans through our career financial advisors. These advisors allow us to develop long-term relationships with our customers by engaging with them early in their careers and providing customized solutions and support. Approximately 26% of our individual customers have been customers of our Group Retirement business for more than 20 years and the average length of our relationships with plan sponsors exceeds 28 years. Our strong customer relationships have led to growth in our AUMA, evidenced by stable in-plan spread-based assets, growing in-plan fee-based assets and growing out-of-plan assets. Our Group Retirement business generates a combination of spread and fee income. While the revenue mix remains balanced, we have grown our advisory and brokerage fee revenue over the last several years, which provides a less capital intensive stream of cash flows. |
• | Life Insurance — We offer a range of life insurance and protection solutions in the approximately $159 billion U.S. life insurance market (based on premium) as of December 31, 2021, according to the Insurance Information Institute, with a growing international presence in the UK and Ireland. We are a key player in the term, indexed universal life and smaller face whole life markets; ranking as a top 15 seller of term, universal and whole life products as of December 31, 2021. Our competitive and flexible product suite is designed to meet the needs of our customers, and we actively participate in product lines that we believe have attractive growth and margin prospects. Further, we have strong third-party distribution relationships and a long history in the direct-to-consumer market, providing us |
• | Institutional Markets — We serve the institutional life and retirement insurance market with an array of products that include PRT, institutional life insurance sold through the bank-owned life insurance and corporate-owned life insurance markets, stable value wraps and structured settlements. We are also active in the capital markets through our FABN program. We provide sophisticated, bespoke risk management solutions to both financial and non-financial institutions. Historically, a small number of incremental transactions have enabled us to generate significant new business volumes, providing a meaningful contribution to earnings, while maintaining a small and efficient operational footprint. We believe that market trends will contribute to growth in our stable value wrap product. Our Institutional Markets products generate earnings primarily through net investment spread, with a smaller portion of fee-based income and underwriting margin. |
($ in billions) | | | Individual Retirement | | | Group Retirement | | | Life | | | Institutional Markets | | | Total |
Fixed Annuities | | | $49.8 | | | $15.4 | | | — | | | — | | | $65.2 |
Fixed Index Annuities | | | 30.4 | | | 4.4 | | | — | | | — | | | 34.8 |
Variable Annuities | | | 68.1 | | | 69.9 | | | — | | | — | | | 137.9 |
Universal Life | | | — | | | — | | | 15.8 | | | — | | | 15.8 |
Traditional Life | | | — | | | — | | | 9.8 | | | — | | | 9.8 |
International Life and Other | | | — | | | — | | | 1.1 | | | — | | | 1.1 |
Pension Risk Transfer | | | — | | | — | | | — | | | 11.5 | | | 11.5 |
Guaranteed Investment Contracts | | | — | | | — | | | — | | | 7.5 | | | 7.5 |
Other | | | — | | | — | | | — | | | 11.2 | | | 11.2 |
Total | | | $148.3 | | | $89.7 | | | $26.7 | | | $30.2 | | | $294.9 |
• | AIG FD — We have a specialized team of approximately 500 sales professionals who partner with and grow our non-affiliated distribution on our broad platform, which includes banks, broker-dealers, general agencies, independent marketing organizations and independent insurance agents. Our direct-to-consumer platform, AIG Direct, primarily markets to middle market consumers through a variety of direct channels, including several types of digital channels such as search advertising, display advertising and email as well as direct mail. |
• | Group Retirement — We have a broad team of relationship managers, consultant relationship professionals, business acquisition professionals and distribution leaders that focus on acquiring, serving and retaining retirement plans. Our affiliated platform, VALIC Financial Advisors, which includes approximately 1,300 career financial advisors as of December 31, 2021, focuses on our Group Retirement business, guiding individuals in both in-plan and out-of-plan investing. |
• | Institutional Relationships — We have strong relationships with insurance brokers, bankers, asset managers, pension consultants and specialized agents who serve as intermediaries in our institutional business. |
(1) | Life Insurance sales, excluding contributions from AIG Direct and AIG Financial Network on a periodic basis, totaled $281 million through the Independent Agents channel for the year ended December 31, 2021. |
• | AIG FD has approximately 500 specialized sales professionals that leverage our strategic account relationships and other partnerships to address multiple client needs. This platform is primarily focused on our non-affiliated distribution through banks, broker-dealers and independent marketing organizations, and specializes in aligning our robust product offering of over 160 life and annuity products with individual partner preferences, reaching independent advisors, agencies and other firms. AIG FD primarily facilitates distribution for our Individual Retirement and Life Insurance businesses, including providing certain partners a unified coverage model that allows for distribution of both our life insurance and annuity products. |
• | Individual Retirement maintains a growing multi-channel distribution footprint built on long-term relationships. As of December 31, 2021, our footprint included over 25,000 advisors and agents actively selling our annuities in the prior 12 months, accessed through long-term relationships with approximately 700 firms distributing our annuity products. These advisors and agents included over 8,500 new producers who sold our annuity products for the first time in 12 months. |
• | Life Insurance has a well-balanced distribution footprint that reaches over 35,000 independent agents as of December 31, 2021, who actively sell our life insurance solutions, through diverse independent channels as well as a direct-to-consumer model. We had access to over 1,000 MGAs and BGAs in |
• | Group Retirement is supported by a broad team of relationship managers, consultant relationship professionals and business acquisition professionals that focus on acquiring, serving and retaining retirement plans with more than 22,000 plan sponsor relationships as of December 31, 2021. Also, VALIC Financial Advisors helps build relationships with employees through our holistic and vertically-integrated offering. Our field force of approximately 1,300 career financial advisors, as of December 31, 2021, comprises experienced field and phone-based financial advisors, retirement plan consultants and experienced financial planners with an average of nearly 10 years of tenure with VALIC Financial Advisors. These professionals provide education, financial planning and retirement advice to individuals participating in their employer sponsored plan. Due to the relationships built with individuals and employers, our financial professionals can, as permitted by employer guidelines, build broad relationships to provide financial planning, advisory and retirement solutions to approximately 1.7 million individuals through our in-plan products and services and over 300,000 individuals through our out-of-plan products and services, as of December 31, 2021. |
• | Institutional Markets largely writes bespoke transactions and works with a broad range of consultants and brokers, maintaining relationships with insurance brokers, bankers, asset managers and specialized agents who serve as intermediaries. |
• | We believe we can leverage our broad platform to benefit from changing Individual Retirement market dynamics. We intend to maintain and expand our products to provide income and accumulation benefits to our customers. For example, we recently broadened our product portfolio to include a fee-based fixed index annuity to meet the needs of our investment advisor distribution partners. Through our customized wholesaling model, we plan to capitalize on this opportunity by leveraging both external and proprietary data to identify the highest value opportunities at both the distribution partner and financial professional level. |
• | We believe our high-touch model is well-tailored for many employers in the not-for-profit retirement plan market and enables us to help middle market and mass affluent individuals achieve retirement security. Specifically, our career financial advisors provide education and advice to plan participants while accumulating assets in-plan and can seek to serve more of the participant’s financial needs during their lifetime beyond the in-plan relationship, as permitted by employer guidelines. As of December 31, 2021, we have a large extended customer base of approximately 1.7 million plan participants to whom we have access through our in-plan Group Retirement offerings and 300,000 individuals we serve through our out-of-plan Group Retirement offerings. With in-plan income solutions beginning to emerge, we are well-positioned to benefit from market needs. Moreover, by continuing to offer investment advisory services and third-party annuity products, we expect to capture additional fee-based revenue while providing our clients attractive financial solutions outside of the scope of our own product suite. |
• | Our Life Insurance business has an opportunity to help close the current protection gap in the United States and offer value to our customers internationally. For example, we have begun to offer simplified and less expensive insurance options to middle market pre-retirees looking for final expense protection through the launch of our new SIWL product in the fourth quarter of 2021. Additionally, we expect our strong performance in the term life insurance market to accelerate through enhanced consumer awareness of life insurance coupled with an improved new business process. Our long history in the direct-to-consumer market through a variety of direct-to-consumer channels provides valuable insights and experience for these opportunities. |
• | Our Institutional Markets business has developed relationships with brokers, consultants and other distribution partners to drive increased earnings for its products. We expect to continue to achieve attractive risk-adjusted returns through PRT deals by focusing on the larger end of the full plan termination market where we can leverage our differentiated capabilities around managing market risks, asset-in-kind portfolios and deferred participant longevity. Additionally, we plan to grow our GIC portfolio by expanding our FABN program. We believe that our Blackstone partnership will differentiate our competitive position by providing assets with a duration, liquidity and return profile that are well-suited to our Institutional Markets offerings, allowing us to grow our transaction volume. |
• | simplify our customer service model and modernize our technology infrastructure with more efficient, up-to-date alternatives, including cloud migration and cloud-based solutions; |
• | further optimize our functional operating model; |
• | build on existing partnership arrangements to further improve scale and drive spend efficiency through technology deployment and process optimization; |
• | rationalize our real estate footprint to align with our business strategy, future operating model and organizational structure; and |
• | optimize our vendor relationships to drive additional savings. |
• | Life Fleet RBC of at least 400%; |
• | Return of capital to stockholders equal to 60 to 65% of AATOI, consisting of common stockholder dividends of $600 million each year and share repurchases, subject to approval by our Board (see “Dividend Policy”); and |
• | Adjusted ROAE in the range of 12% to 14% based on current accounting rules in effect on the date hereof and without giving effect to any changes resulting from the adoption of the new accounting standard for long duration contracts. |
• | annual equity market returns, the yield on the 10-year U.S. Treasury note rising ratably over the next 10 years and policyholder behavior based on our current best estimate assumptions which include dynamic variables to reflect the impact of a change in market levels; |
• | our projected amount of new sales of individual retirement, group retirement, life insurance and institutional markets products; |
• | geopolitical stability; |
• | the absence of material changes in regulation; |
• | that we have not adopted the new accounting standard for long-duration contracts with respect to the financial goal related our Adjusted ROAE; |
• | effective tax rates; |
• | our degree of leverage and capital structure following the Recapitalization due to indebtedness incurred in connection with the Recapitalization or following consummation of this offering as described under “Recapitalization—Indebtedness Remaining Outstanding Following this Offering;” |
• | limited differences between actual experience and existing actuarial assumptions, including assumptions for which existing experience is limited and experience will emerge over time; |
• | the efficacy and maturity of existing actuarial models to appropriately reflect all aspects of our existing and in-force businesses; |
• | the effectiveness and cost of our hedging program and the impact of our hedging strategy on net income volatility and possible negative effects on our statutory capital; |
• | our ability to implement our business strategy; |
• | our ability to implement cost reduction and productivity strategies; |
• | the successful implementation of our key initiatives outlined above; |
• | our access to capital; and |
• | general conditions of the capital markets and the markets in which our businesses operate. |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ billions) | ||||||||||||||||
AUMA by product | | | | | | | | | | | | | ||||||
Fixed annuities | | | $57.8 | | | 36.1% | | | $60.5 | | | 38.5% | | | $60.4 | | | 41.6% |
Fixed index annuities | | | 31.8 | | | 19.8% | | | 27.9 | | | 17.7% | | | 22.1 | | | 15.2% |
Variable annuities | | | 70.6 | | | 44.1% | | | 68.9 | | | 43.8% | | | 62.8 | | | 43.2% |
Total(1) | | | $160.2 | | | 100.0% | | | $157.3 | | | 100.0% | | | $145.3 | | | 100.0% |
(1) | Excludes AUA of our retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated. |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ millions) | | | | | ||||||||
Sales by product | | | | | | | | | | | | | ||||||
Fixed annuities | | | $3,011 | | | 22.0% | | | $2,535 | | | 26.3% | | | $5,280 | | | 38.8% |
Fixed index annuities | | | 5,621 | | | 41.2% | | | 4,096 | | | 42.5% | | | 5,466 | | | 40.1% |
Variable annuities | | | 5,025 | | | 36.8% | | | 3,003 | | | 31.2% | | | 2,879 | | | 21.1% |
Total(1) | | | $13,657 | | | 100.0% | | | $9,634 | | | 100.0% | | | $13,625 | | | 100.0% |
(1) | Excludes the sale of our retail mutual funds business that were sold to Touchstone on July 16, 2021, or otherwise liquidated. |
| | As of December 31, | |||||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | 2015 | |
Sales ranking | | | | | | | | | | | | | | | |||||||
Overall | | | 2 | | | 2 | | | 2 | | | 1 | | | 2 | | | 2 | | | 2 |
Fixed annuities | | | 4 | | | 5 | | | 2 | | | 3 | | | 2 | | | 2 | | | 2 |
Fixed index annuities | | | 3 | | | 3 | | | 3 | | | 4 | | | 7 | | | 5 | | | 4 |
Variable annuities | | | 5 | | | 6 | | | 6 | | | 6 | | | 5 | | | 5 | | | 4 |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ millions) | | | | | ||||||||
Spread and fee income | | | | | | | | | | | | | ||||||
Spread income(1) | | | $2,650 | | | 63.9% | | | $2,430 | | | 64.8% | | | $2,500 | | | 66.6% |
Fee income(2) | | | 1,500 | | | 36.1% | | | 1,321 | | | 35.2% | | | 1,254 | | | 33.4% |
Total | | | $4,150 | | | 100.0% | | | $3,751 | | | 100.0% | | | $3,754 | | | 100.0% |
(1) | Spread income is defined as premium and net investment income less benefits and interest credited. |
(2) | Fee income is defined as policy fees plus advisory fee and other income. |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ millions) | | | | | ||||||||
Sales by distribution channel | | | | | | | | | | | | | ||||||
Broker dealer(1) | | | $6,779 | | | 49.7% | | | $4,576 | | | 47.5% | | | $5,998 | | | 44.0% |
Banks | | | 4,756 | | | 34.8% | | | 3,659 | | | 38.0% | | | 5,376 | | | 39.5% |
Independent non-registered marketing organizations/BGAs(2) | | | 2,122 | | | 15.5% | | | 1,399 | | | 14.5% | | | 2,251 | | | 16.5% |
Total | | | $13,657 | | | 100.0% | | | $9,634 | | | 100.0% | | | $13,625 | | | 100.0% |
(1) | Includes wirehouses, independent and regional broker-dealers. |
(2) | Includes career agents. |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ billions) | | | | | ||||||||
Fixed annuity reserves by GMIR | | | | | | | | | | | | | ||||||
No GMIR | | | $2.9 | | | 5.8% | | | $2.7 | | | 5.4% | | | $2.3 | | | 4.5% |
<2.00% | | | 25.4 | | | 51.0% | | | 24.8 | | | 49.1% | | | 24.2 | | | 46.9% |
2.00 – 2.99% | | | 3.8 | | | 7.6% | | | 4.2 | | | 8.4% | | | 5.0 | | | 9.7% |
3.00 – 4.49% | | | 17.2 | | | 34.6% | | | 18.3 | | | 36.1% | | | 19.4 | | | 37.7% |
4.50%+ | | | 0.5 | | | 1.0% | | | 0.5 | | | 1.0% | | | 0.6 | | | 1.2% |
Total | | | $49.8 | | | 100.0% | | | $50.5 | | | 100.0% | | | $51.5 | | | 100.0% |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ billions) | | | | | ||||||||
Fixed annuity reserves by surrender charge | | | | | | | | | | | | | ||||||
No surrender charge | | | $26.4 | | | 53.0% | | | $27.1 | | | 53.6% | | | $27.6 | | | 53.6% |
Greater than 0% – 2% | | | 2.1 | | | 4.2% | | | 2.3 | | | 4.6% | | | 2.1 | | | 4.1% |
Greater than 2% – 4% | | | 2.4 | | | 4.9% | | | 2.7 | | | 5.3% | | | 3.2 | | | 6.2% |
Greater than 4% | | | 16.5 | | | 33.1% | | | 16.2 | | | 32.1% | | | 16.4 | | | 31.8% |
Non-surrenderable | | | 2.4 | | | 4.8% | | | 2.2 | | | 4.4% | | | 2.2 | | | 4.3% |
Total | | | $49.8 | | | 100.0% | | | $50.5 | | | 100.0% | | | $51.5 | | | 100.0% |
| | As of December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ millions) | |||||||
Fixed annuity rider reserves | | | | | | | |||
GMWB | | | $256 | | | $138 | | | $38 |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ millions) | | | | | ||||||||
Fixed index annuity reserves with and without a GMWB | | | | | | | | | | | | | ||||||
No GMWB | | | $19,027 | | | 62.6% | | | $15,084 | | | 58.9% | | | $12,164 | | | 57.9% |
GMWB | | | 11,347 | | | 37.4% | | | 10,520 | | | 41.1% | | | 8,839 | | | 42.1% |
Total | | | $30,374 | | | 100.0% | | | $25,604 | | | 100.0% | | | $21,003 | | | 100.0% |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ billions) | | | | | ||||||||
Fixed index annuity reserves by surrender charge | | | | | | | | | | | | | ||||||
No surrender charge | | | $2.0 | | | 6.6% | | | $1.4 | | | 5.4% | | | $0.7 | | | 3.5% |
Greater than 0% – 2% | | | 1.7 | | | 5.6% | | | 1.1 | | | 4.3% | | | 0.3 | | | 1.5% |
Greater than 2% – 4% | | | 4.2 | | | 13.8% | | | 3.5 | | | 13.6% | | | 2.6 | | | 12.4% |
Greater than 4% | | | 22.5 | | | 74.0% | | | 19.6 | | | 76.7% | | | 17.4 | | | 82.6% |
Non-surrenderable | | | — | | | — | | | — | | | — | | | — | | | — |
Total | | | $30.4 | | | 100.0% | | | $25.6 | | | 100.0% | | | $21.0 | | | 100.0% |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ billions) | | | | | ||||||||
Variable annuity account value by GMDB design | | | | | | | | | | | | | ||||||
No GMDB | | | $1.0 | | | 1.6% | | | $0.9 | | | 1.5% | | | $0.7 | | | 1.3% |
Return of premium | | | 38.9 | | | 60.7% | | | 36.5 | | | 61.3% | | | 34.8 | | | 62.2% |
Highest contract value attained | | | 17.3 | | | 27.0% | | | 16.7 | | | 27.9% | | | 15.8 | | | 28.3% |
Rollups | | | 2.9 | | | 4.5% | | | 2.9 | | | 4.9% | | | 2.8 | | | 4.9% |
Return of account value | | | 3.9 | | | 6.1% | | | 2.6 | | | 4.4% | | | 1.9 | | | 3.3% |
Total account value with guarantees | | | $64.0 | | | 100.0% | | | $59.6 | | | 100.0% | | | $55.9 | | | 100.0% |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ billions) | | | | | ||||||||
Variable annuity account value by benefit | | | | | | | | | | | | | ||||||
GMWB | | | $48.4 | | | 75.6% | | | $45.0 | | | 75.5% | | | $42.5 | | | 76.0% |
GMDB only | | | 12.2 | | | 19.0% | | | 11.4 | | | 19.1% | | | 10.5 | | | 18.8% |
GMIB | | | 2.4 | | | 3.8% | | | 2.3 | | | 3.9% | | | 2.2 | | | 3.9% |
No guarantee | | | 1.0 | | | 1.6% | | | 0.9 | | | 1.5% | | | 0.7 | | | 1.3% |
Total | | | $64.0 | | | 100.0% | | | $59.6 | | | 100.0% | | | $55.9 | | | 100.0% |
• | VIX-indexed fee: This feature increases the rider fee when market volatility rises, helping offset higher costs of hedging during periods of high equity volatility as well as providing value to the customer through lower fees during periods of lower equity volatility in the market. This feature is present in 90% of our total in-force GMWB variable annuity business as of December 31, 2021 and 100% of new GMWB variable annuity sales in 2021. The feature is unique to our product lines. |
• | Required fixed account allocation: This feature requires 10 – 20% of account value to be invested in an account that credits a fixed interest rate and provides no equity exposure. This feature is present in 90% of our in-force GMWB business as of December 31, 2021 and 100% of new GMWB variable annuity sales with living benefits in 2021. The feature was introduced by our company in 2010. |
• | Volatility controlled funds: These funds, which are offered or in some cases are required in conjunction with certain living benefits, seek to maintain consistent and capped volatility exposure for the underlying funds in the variable annuity by managing exposures to volatility targets and/or caps instead of a more traditional fixed equity allocation. These funds also limit equity allocation and provide equity market tail protection through put options purchased within the funds. The funds account for 68% of our in-force GMWB living benefit AUMA as of December 31, 2021 and 20% of new GMWB variable annuity sales in 2021. Currently, we sell two main living benefit riders, one that requires election of volatility control funds with more generous payout features and one that does not require the use of volatility control funds and offers less generous payout features. The latter product is more popular, resulting in a lower percentage of new sales that use volatility control funds. We believe both riders are appropriately priced and have significant risk mitigating features. |
• | Withdrawal rate reduction at claim: This feature lowers the guaranteed income amount after the account value is depleted, consequently lowering our claim payments. This feature is present in 72% of our in-force GMWB business as of December 31, 2021 and 78% of new GMWB variable annuity sales in 2021. |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | NAR | | | Reserve | | | NAR | | | Reserve | | | NAR | | | Reserve | |
| | | | | | ($ millions) | | | | | ||||||||
Variable annuity NAR and rider reserves(1)(2) | | | | | | | | | | | | | ||||||
GMWB | | | $471 | | | $2,484 | | | $1,082 | | | $3,619 | | | $300 | | | $2,581 |
GMDB | | | 726 | | | 398 | | | 788 | | | 369 | | | 872 | | | 359 |
GMIB | | | 54 | | | 12 | | | 83 | | | 12 | | | 78 | | | 12 |
(1) | The NAR for each GMDB and GMWB is calculated irrespective of the existence of other features. As a result, the NAR for each of GMDB and GMWB is not additive to that of other features. |
(2) | The NAR for GMDB represents the amount of benefits in excess of account value if death claims were filed on all contracts on the balance sheet date. The NAR for GMWB represents the present value of minimum guaranteed withdrawal payments, in accordance with contract terms, in excess of account value, assuming no lapses. |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | | | | | ($ billions) | | | | | ||||||||
Total reserves by surrender charge | | | | | | | | | | | | | ||||||
No surrender charge | | | $34.0 | | | 50.0% | | | $29.6 | | | 45.7% | | | $23.7 | | | 39.5% |
Greater than 0% – 2% | | | 10.9 | | | 16.0% | | | 10.5 | | | 16.3% | | | 9.2 | | | 15.3% |
Greater than 2% – 4% | | | 9.9 | | | 14.5% | | | 12.0 | | | 18.5% | | | 12.3 | | | 20.5% |
Greater than 4% | | | 13.3 | | | 19.5% | | | 12.6 | | | 19.5% | | | 14.8 | | | 24.7% |
Non-surrenderable | | | — | | | — | | | — | | | — | | | — | | | — |
Total | | | $68.1 | | | 100.0% | | | $64.7 | | | 100.0% | | | $60.0 | | | 100.0% |
| | For the years ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ millions) | |||||||
Hedging result summary | | | | | | | |||
Net increase (decrease) on pre-tax income (loss) | | | $150 | | | $206 | | | $(139) |
Assumptions | | | Base Case Scenario | | | Upside Scenario | | | Downside Scenario | | | Extreme Downside Scenario |
Equity total return (annualized) | | | 8% | | | 10% | | | (25)% shock in July 2021, 8% recovery | | | (40)% shock in July 2021, 8% recovery |
Interest rates (based on June 30, 2021 US Treasury Par curve, i.e., forward curve) | | | Forward curve illustrative 10-year U.S. Treasury rates: June 30, 2021: 1.45% June 30, 2026: 2.22% | | | Rates immediately increase 100 bps | | | Rates immediately decrease 100 bps | | | Rates immediately decrease 100 bps |
Average separate account returns net of asset management fees after shock (annualized)(1) | | | 5.7% | | | 7.1% | | | 5.6% | | | 5.5% |
(1) | In the Downside and Extreme Downside scenarios, after the initial equity shock, the impact of which is excluded from the average separate account returns net of asset management fees shown, the equity total return reverts to the 8% Base Case assumption. |
Estimated July 1, 2021 to June 30, 2026 | | | Base Case Scenario | | | Upside Scenario | | | Downside Scenario | | | Extreme Downside Scenario |
(in billions) | | | | | | | | | ||||
VA Distributable Earnings Projections(a) | | | $6.6 | | | $6.7 | | | $4.7 | | | $3.5 |
(a) | Modeled RBC reflects the variable annuity business on a standalone basis and does not reflect potential diversification benefits with other lines of business. |
Estimated as of June 30, 2021 | | | Base Case Scenario | | | Upside Scenario | | | Downside Scenario | | | Extreme Downside Scenario |
(in billions) | | | | | | | | | ||||
Present value of pre-tax cash flows(a) | | | $(20.9) | | | $(20.6) | | | $(21.3) | | | $(22.5) |
Variable annuity assets | | | $36.0 | | | $36.0 | | | $36.0 | | | $36.0 |
Total (including variable annuity assets)(a) | | | $15.1 | | | $15.5 | | | $14.7 | | | $13.5 |
(a) | Modeled RBC reflects the variable annuity business on a standalone basis and does not reflect potential diversification benefits with other lines of business. |
• | Economic scenarios. Our economic scenarios are hypothetical projections of future equity and interest rates. Actual market conditions can be significantly more complex than our scenarios, which will cause our actual results to deviate from our estimated results, even if the annual performance of equity and interest rates is similar to that assumed in our economic scenarios. |
• | Separate account basis risk. The assets that are held in the separate account are mapped to different equity or fixed income indices in order to model the expected future returns. The actual fund return for these funds will differ from the mapped estimates used in our modeling. |
• | Actuarial assumptions. Actuarial assumptions are based on our historical experience and future expectations, and actual future experience will deviate from these assumptions. Actuarial assumptions may also change over time as additional experience is observed. For example, key assumptions include policyholder behavior assumptions with certain dynamic components, i.e., variables which may change as a result of financial market conditions, to capture the general trend of our policyholders’ reaction to market conditions. The actual reaction of policyholders to market conditions may deviate from our assumptions, and these assumptions may also be refined over time. |
• | Hedging. To represent our core hedging program within the projections, we project a hedge asset portfolio, mainly comprised of derivatives, according to targets defined in our strategy. The estimate of our hedging targets is based on models containing a number of simplifications which could cause the projection of targets to differ from the actual evolution of these targets over time. Additionally, we may not be able to effectively implement our intended hedging strategy due to a variety of factors including unavailability of desired instruments, excessive transaction costs, or deviations in market prices for hedge assets from our modeled assumptions. See “—Our Segments—Individual Retirement—Risk Management—Hedging.” |
• | Regulatory changes. The projections exclude any potential future regulatory changes such as updates to the NAIC model regulations, including (i) update or replacement of the Economic Scenario Generator (as defined in the NAIC model regulations) used to calculate statutory reserves and (ii) changes to RBC ratio requirements. |
| | For the years ended December 31 | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | $ | | | $ | | | $ | |
| | ($ billions) | |||||||
AUMA by asset type | | | | | | | |||
In-plan spread based | | | $32.5 | | | $33.4 | | | $31.4 |
In-plan fee based | | | 60.3 | | | 53.9 | | | 48.1 |
Total in-plan AUMA(1) | | | $92.8 | | | $87.3 | | | $79.5 |
Out-of-plan proprietary fixed annuity and fixed index annuities | | | 9.6 | | | 9.3 | | | 8.4 |
Out-of-plan proprietary variable annuities | | | 23.6 | | | 22.9 | | | 21.1 |
Total out-of-plan proprietary annuities(2) | | | 33.2 | | | 32.2 | | | 29.5 |
Advisory and brokerage | | | 13.8 | | | 10.6 | | | 9.2 |
Total out-of-plan AUMA | | | $47.0 | | | $42.8 | | | $38.7 |
Total AUMA | | | $139.8 | | | $130.1 | | | $118.2 |
(1) | Includes $15.1 billion, $14.3 billion and $13.5 billion of AUMA for the years ended December 31, 2021, 2020 and 2019, respectively, that is associated with our in-plan investment advisory service that we offer to participants at an additional fee. |
(2) | Includes $4.9 billion, $4.3 billion and $3.8 billion of AUMA for the years ended December 31, 2021, 2020 and 2019, respectively, in our proprietary advisory variable annuity. Together with our out-of-plan advisory and brokerage assets shown in the table above, we had a total of $18.7 billion, $15.0 billion and $13.0 billion of out-of-plan advisory assets for the years ended December 31, 2021, 2020 and 2019, respectively. |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ billions) | ||||||||||||||||
General account reserves by GMIR | | | | | | | | | | | | | ||||||
No GMIR | | | $5.0 | | | 11.2% | | | $5.0 | | | 11.2% | | | $4.3 | | | 10.1% |
<2.0% | | | 12.1 | | | 27.1% | | | 11.2 | | | 25.3% | | | 10.3 | | | 24.1% |
2.00 – 2.99% | | | 5.1 | | | 11.3% | | | 5.4 | | | 12.2% | | | 5.4 | | | 12.7% |
3.00 – 4.49% | | | 15.3 | | | 34.4% | | | 15.5 | | | 35.0% | | | 15.4 | | | 36.2% |
4.50%+ | | | 7.1 | | | 16.0% | | | 7.2 | | | 16.3% | | | 7.2 | | | 16.9% |
Total | | | $44.6 | | | 100.0% | | | $44.3 | | | 100.0% | | | $42.6 | | | 100.0% |
• | In-plan recordkeeping: We offer an open architecture recordkeeping platform that allows plan participants to allocate money to a variety of mutual fund options or a fixed interest account. We provide access to more than 12,000 investments on this platform from over 150 fund families/asset managers. A fixed investment only option can also be provided on this platform for plans where we are not the recordkeeper. We receive fee income for our provision of recordkeeping services and generate spread income on the fixed interest account. |
• | In-plan annuity: We offer a flexible group variable and fixed annuity that allows plan sponsors to select from a variety of fee structures, liquidity provisions and fund options. Several variations of our in-plan annuity are available based on plan characteristics, market, size and preferences. Customers receive additional protection from a modest guaranteed minimum death benefit and minimum guaranteed credited rates on the fixed account option. We receive fee income on the variable assets and generate spread income on the fixed annuity assets. |
• | Investment advisory: Through our career financial advisors and with approval from the plan sponsor, we offer an in-plan investment advisory service to participants at an additional fee. As of December 31, 2021, we had $15.1 billion in AUMA. |
• | In-plan income solutions: We recently announced a partnership with J.P. Morgan Asset Management and are in active discussion with other partners to offer in-plan guaranteed lifetime income solutions as an option in retirement plans, including as an investment option for plans we do not administer. |
• | Annuities — We offer a suite of proprietary annuities for accumulation and guaranteed lifetime income. In addition, we offer a non-proprietary annuity as needed to ensure we have a broad range of solutions available to our clients. Several of the proprietary annuities and living benefits are customized versions of products offered by Individual Retirement business. Our proprietary annuities include: |
• | Fixed annuities: We offer a fixed annuity with a multi-year guaranteed fixed rate and another version with a guaranteed lifetime income benefit; |
• | Fixed index annuities: We offer a fixed index annuity providing accumulation and guaranteed lifetime income with a variety of index crediting strategies and multiple indexes; and |
• | Variable annuities: We offer a variable annuity for asset accumulation in both a brokerage and investment advisory account, including a version with an optional guaranteed lifetime income rider. |
• | Advisory and brokerage products: |
• | Our investment advisory solution offers fiduciary, fee-based investments with a variety of asset managers and strategists; and |
• | Our full-service brokerage offering supports non-proprietary variable annuities, securities brokerage accounts, mutual funds and 529 plans. |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
In-plan(1)(2) | | | | | | | | | | | | | ||||||
Periodic | | | $3,758 | | | 36.6% | | | $3,676 | | | 41.4% | | | $3,626 | | | 38.0% |
Non-periodic | | | 2,153 | | | 21.0% | | | 1,736 | | | 19.6% | | | 1,913 | | | 20.0% |
Total in-plan | | | 5,911 | | | 57.6% | | | 5,412 | | | 61.0% | | | 5,539 | | | 58.0% |
Out-of-plan | | | | | | | | | | | | | ||||||
Out-of-plan proprietary annuities | | | 1,855 | | | 18.1% | | | 2,084 | | | 23.5% | | | 2,807 | | | 29.5% |
Advisory and brokerage | | | 2,502 | | | 24.3% | | | 1,376 | | | 15.5% | | | 1,197 | | | 12.5% |
Total out-of-plan | | | 4,357 | | | 42.4% | | | 3,460 | | | 39.0% | | | 4,004 | | | 42.0% |
Total | | | $10,268 | | | 100.0% | | | $8,872 | | | 100.0% | | | $9,543 | | | 100.0% |
(1) | In-plan premium and deposits include sales of variable and fixed annuities as well as mutual funds for 403(b), 401(a), 457(b) and 401(k) plans. |
(2) | Includes $3.1 billion, $3.0 billion and $2.9 billion of inflows related to in-plan mutual funds for years ended December 31, 2021, 2020 and 2019, respectively. |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
Spread and fee income | | | | | | | | | | | | | ||||||
Spread income | | | $1,275 | | | 59.8% | | | $1,088 | | | 60.3% | | | $1,133 | | | 62.2% |
Fee income | | | 859 | | | 40.2% | | | 715 | | | 39.7% | | | 690 | | | 37.8% |
Total | | | $2,134 | | | 100.0% | | | $1,803 | | | 100.0% | | | $1,823 | | | 100.0% |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ billions) | ||||||||||||||||
Reserves by product(1)(2)(3) | | | | | | | | | | | | | ||||||
Variable annuity without GLB | | | $67.1 | | | 74.8% | | | $63.5 | | | 74.1% | | | $59.4 | | | 74.0% |
Variable annuity with GLB | | | 2.8 | | | 3.1% | | | 2.9 | | | 3.4% | | | 2.9 | | | 3.5% |
Fixed annuity | | | 15.4 | | | 17.2% | | | 15.1 | | | 17.7% | | | 14.6 | | | 18.2% |
Fixed index annuity | | | 4.4 | | | 4.9% | | | 4.1 | | | 4.8% | | | 3.5 | | | 4.3% |
Total | | | $89.7 | | | 100.0% | | | $85.6 | | | 100.0% | | | $80.4 | | | 100.0% |
(1) | In-plan reserves by product include reserves of variable and fixed annuities as well as mutual funds for 403(b), 401(a), 457(b) and 401(k) plans. |
(2) | Includes in-plan reserves of $59.4 billion, $56.6 billion and $53.3 billion as of December 31, 2021, 2020 and 2019 respectively. |
(3) | Includes $21.9 billion, $20.8 billion and $19.5 billion of out-of-plan variable annuities as of December 31, 2021, 2020 and 2019 respectively. Includes $8.5 billion, $8.2 billion and $7.6 billion of out-of-plan fixed and fixed index annuities as of December 31, 2021, 2020 and 2019. |
• | Retirement plans: For recordkeeping, plans using our in-plan recordkeeping are designed and priced on a case-by-case basis to balance competitiveness, risk, capital needs and profitability. For annuity plans, we manage crediting rates, investment options and our cost structure to help achieve desired returns. |
• | Proprietary annuities: Our proprietary annuities are primarily accumulation-oriented products. Products with guaranteed living benefits mirror the design and risk management framework, including hedging, followed by Individual Retirement. |
• | Variable annuity: Our variable annuity GMDB exposure is primarily related to return of premium guarantees, including roll-up policies, 100% of which will revert to return of premium after the relevant individual reaches age 70. |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ billions) | ||||||||||||||||
Variable annuity account value by GMDB design | | | | | | | | | | | | | ||||||
Roll-up, will revert to return of premium | | | $40.5 | | | 58.6% | | | $39.4 | | | 60.0% | | | $37.9 | | | 61.4% |
Roll-up, reverted to return of premium | | | 16.8 | | | 24.3% | | | 14.9 | | | 22.7% | | | 13.0 | | | 21.1% |
Return of premium | | | 11.6 | | | 16.7% | | | 11.1 | | | 16.8% | | | 10.6 | | | 17.1% |
Return of account value | | | 0.2 | | | 0.3% | | | 0.2 | | | 0.4% | | | 0.2 | | | 0.3% |
Maximum anniversary value | | | 0.1 | | | 0.1% | | | 0.1 | | | 0.1% | | | 0.0 | | | 0.1% |
Total | | | $69.2 | | | 100.0% | | | $65.7 | | | 100.0% | | | $61.7 | | | 100.0% |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ billions) | ||||||||||||||||
Variable annuity account values by benefit type(1) | | | | | | | | | | | | | ||||||
GMDB only | | | $66.5 | | | 96.0% | | | $63.0 | | | 95.9% | | | $59.0 | | | 95.6% |
GMDB and GMWB | | | 2.7 | | | 4.0% | | | 2.7 | | | 4.1% | | | 2.7 | | | 4.4% |
Total | | | $69.2 | | | 100.0% | | | $65.7 | | | 100.0% | | | $61.7 | | | 100.0% |
(1) | Excludes small block of assumed business with total account value of $161 million as of December 31, 2021. |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | NAR | | | Reserve | | | NAR | | | Reserve | | | NAR | | | Reserve | |
| | ($ millions) | ||||||||||||||||
Variable Annuity NAR and Reserves | | | | | | | | | | | | | ||||||
GMDB | | | $161 | | | $35 | | | $180 | | | $40 | | | $205 | | | $21 |
GMWB | | | 24 | | | 64 | | | 61 | | | 169 | | | 27 | | | 111 |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
Fixed index annuity account value by benefit | | | | | | | | | | | | | ||||||
No GMWB | | | $2,249 | | | 54.8% | | | $2,003 | | | 53.0% | | | $1,668 | | | 51.2% |
GMWB | | | 1,853 | | | 45.2% | | | 1,775 | | | 47.0% | | | 1,588 | | | 48.8% |
Total | | | $4,102 | | | 100.0% | | | $3,778 | | | 100.0% | | | 3,256 | | | 100.0% |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
CPPE(1) sales by geography | | | | | | | | | | | | | ||||||
Domestic Life | | | $252 | | | 55.6% | | | $267 | | | 58.6% | | | $323 | | | 64.3% |
International Life | | | 201 | | | 44.4% | | | 188 | | | 41.4% | | | 179 | | | 35.7% |
Total | | | $453 | | | 100.0% | | | $455 | | | 100.0% | | | $502 | | | 100.0% |
(1) | Life insurance sales are shown on a CPPE basis. Life insurance sales include periodic premiums from new business expected to be collected over a one-year period and 10% of unscheduled and single premiums from new and existing policyholders. Sales of accident and health insurance represent annualized first-year premium from new policies. |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
Reserves by geography | | | | | | | | | | | | | ||||||
Domestic Life | | | $26,141 | | | 97.7% | | | $25,968 | | | 98.0% | | | $24,760 | | | 98.4% |
International Life | | | 628 | | | 2.3% | | | 520 | | | 2.0% | | | 401 | | | 1.6% |
Total insurance reserves | | | $26,769 | | | 100.0% | | | $26,488 | | | 100.0% | | | $25,161 | | | 100.0% |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
Domestic Life premiums and deposits by product | | | | | | | | | | | | | ||||||
Traditional Life | | | $1,737 | | | 41.0% | | | 1,696 | | | 41.9% | | | $1,683 | | | 42.8% |
Universal Life | | | 1,635 | | | 38.7% | | | 1,649 | | | 40.7% | | | 1,666 | | | 42.4% |
Other(1) | | | 67 | | | 1.6% | | | 76 | | | 1.9% | | | 97 | | | 2.4% |
Total U.S. | | | $3,439 | | | 81.3% | | | $3,421 | | | 84.5% | | | $3,446 | | | 87.6% |
International | | | 789 | | | 18.7% | | | 626 | | | 15.5% | | | 486 | | | 12.4% |
Total | | | $4,228 | | | 100.0% | | | $4,047 | | | 100.0% | | | $3,932 | | | 100.0% |
(1) | Includes accident & health and group benefits |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ billions) | ||||||||||||||||
Domestic Life reserves by product | | | | | | | | | | | | | ||||||
Universal Life | | | $15.8 | | | 60.5% | | | $15.8 | | | 60.8% | | | $14.6 | | | 58.9% |
Traditional Life | | | 9.8 | | | 37.5% | | | 9.7 | | | 37.3% | | | 9.6 | | | 38.7% |
Other(1) | | | 0.5 | | | 2.0% | | | 0.5 | | | 1.9% | | | 0.6 | | | 2.4% |
Total | | | $26.1 | | | 100.0% | | | $26.0 | | | 100.0% | | | $24.8 | | | 100.0% |
(1) | Includes accident & health and group benefits |
| | Years Ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | ($ millions) | |||||||
ULSG net liability, excluding impact of unrealized appreciation on investments, beginning of year | | | $2,363 | | | $1,942 | | | $1,912 |
Actuarial Assumption Updates | | | (145) | | | 180 | | | 33 |
Incurred guaranteed benefits | | | 830 | | | 711 | | | 466 |
Paid guaranteed benefits | | | (489) | | | (470) | | | (469) |
ULSG net liability, excluding impact of unrealized appreciation on investments, end of year | | | $2,559 | | | $2,363 | | | $1,942 |
ULSG Account Value | | | 1,858 | | | 1,902 | | | 1,905 |
ULSG Net Liability, excluding impact of unrealized appreciation on investments, end of year plus ULSG AV | | | $4,417 | | | $ 4,265 | | | $ 3,847 |
ULSG fee income | | | $1,027 | | | $1,087 | | | $1,089 |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
Domestic Life CPPE by product | | | | | | | | | | | | | ||||||
Traditional Life | | | $150 | | | 59.5% | | | $154 | | | 57.7% | | | $182 | | | 56.4% |
Universal Life | | | 102 | | | 40.5% | | | 113 | | | 42.3% | | | 141 | | | 43.6% |
Total | | | $252 | | | 100.0% | | | $267 | | | 100.0% | | | $323 | | | 100.0% |
| | As of December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
| | $ | | | $ | | | $ | |
| | ($ millions) | |||||||
Underwriting margin | | | | | | | |||
Underwriting margin | | | $1,067 | | | $1,261 | | | $1,473 |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
Domestic Life CPPE by channel | | | | | | | | | | | | | ||||||
Brokerage | | | $84 | | | 33.3% | | | $83 | | | 31.1% | | | $128 | | | 39.3% |
Partners Group | | | 69 | | | 27.4% | | | 79 | | | 29.6% | | | 69 | | | 21.2% |
Transactional Markets Group | | | 60 | | | 23.8% | | | 53 | | | 19.9% | | | 44 | | | 13.5% |
Direct | | | 30 | | | 11.9% | | | 38 | | | 14.2% | | | 43 | | | 13.2% |
Other(1) | | | 9 | | | 3.6% | | | 14 | | | 5.2% | | | 41 | | | 12.6% |
Total | | | $252 | | | 100.0% | | | $267 | | | 100.0% | | | $325 | | | 100.0% |
(1) | Includes the Insurance Solutions Group and AIG Financial Network channels. AIG Financial Network is currently being decommissioned but is included for completeness. |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
UK Life CPPE by product | | | | | | | | | | | | | ||||||
Group business | | | $100 | | | 49.7% | | | $96 | | | 51.0% | | | $62 | | | 34.6% |
Term Life | | | 69 | | | 34.3% | | | 63 | | | 33.5% | | | 71 | | | 39.7% |
Critical illness | | | 18 | | | 9.0% | | | 14 | | | 7.4% | | | 19 | | | 10.6% |
Whole Life | | | 11 | | | 5.5% | | | 11 | | | 5.9% | | | 22 | | | 12.3% |
Income protection | | | 2 | | | 1.0% | | | 2 | | | 1.1% | | | 3 | | | 1.7% |
Benefits and riders | | | 1 | | | 0.5% | | | 2 | | | 1.1% | | | 2 | | | 1.1% |
Total UK Life CPPE | | | $201 | | | 100.0% | | | $188 | | | 100.0% | | | $179 | | | 100.0% |
| | As of December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
Ireland Life gross commission by product | | | | | | | | | | | | | ||||||
Private medical insurance commission(1) | | | $103 | | | 97.2% | | | $90 | | | 97.8% | | | $80 | | | 96.4% |
Life income | | | 2 | | | 1.9% | | | 1 | | | 1.1% | | | 1 | | | 1.2% |
Other income | | | 1 | | | 0.9% | | | 1 | | | 1.1% | | | 2 | | | 2.4% |
Total | | | $106 | | | 100.0% | | | $92 | | | 100.0% | | | $83 | | | 100.0% |
(1) | Includes health and well-being. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Premiums | | | $3,774 | | | $2,564 | | | $1,877 |
Deposits | | | 1,158 | | | 2,284 | | | 931 |
Other(1) | | | 25 | | | 25 | | | 27 |
Premiums and deposits | | | $4,957 | | | $4,873 | | | $2,835 |
(1) | Other principally consists of ceded premiums, in order to reflect gross premiums and deposits. |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ millions) | ||||||||||||||||
Underwriting margin, fee income and spread income | | | | | | | | | | | | | ||||||
Spread income | | | $478 | | | 74.6% | | | $290 | | | 67.9% | | | $251 | | | 63.7% |
Underwriting margin | | | 102 | | | 15.9% | | | 75 | | | 17.6% | | | 75 | | | 19.0% |
Fee income | | | 61 | | | 9.5% | | | 62 | | | 14.5% | | | 68 | | | 17.3% |
Total | | | $641 | | | 100.0% | | | $427 | | | 100.0% | | | $394 | | | 100.0% |
| | For the years ended December 31, | ||||||||||
| | 2021 | | | 2020 | |||||||
| | $ | | | % | | | $ | | | % | |
| | ($ in millions) | ||||||||||
Insurance reserves | | | | | | | | | ||||
PRT | | | $11,469 | | | 38.0% | | | $8,237 | | | 30.2% |
GIC | | | 7,477 | | | 24.7% | | | 8,115 | | | 29.7% |
Structured settlement | | | 3,501 | | | 11.6% | | | 3,593 | | | 13.2% |
SVW | | | — | | | — | | | 55 | | | 0.2% |
Corporate Markets | | | 7,772 | | | 25.7% | | | 7,315 | | | 26.8% |
Total | | | $30,219 | | | 100.0% | | | $27,315 | | | 100.0% |
| | For the years ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
| | $ | | | % | | | $ | | | % | | | $ | | | % | |
| | ($ in millions) | ||||||||||||||||
APTOI by product | | | | | | | | | | | | | ||||||
PRT | | | $238 | | | 40.7% | | | $103 | | | 28.1% | | | $74 | | | 23.0% |
GIC | | | 129 | | | 22.1% | | | 85 | | | 23.2% | | | 74 | | | 23.0% |
Structured settlement | | | 90 | | | 15.4% | | | 82 | | | 22.3% | | | 75 | | | 23.3% |
SVW | | | 60 | | | 10.3% | | | 57 | | | 15.5% | | | 63 | | | 19.5% |
Corporate Markets | | | 67 | | | 11.5% | | | 40 | | | 10.9% | | | 36 | | | 11.2% |
Total | | | $584 | | | 100.0% | | | $367 | | | 100.0% | | | $322 | | | 100.0% |
| | For the years ended December 31, | |||||||
| | 2021 | | | 2020 | | | 2019 | |
Impact of Fortitude Re on our comprehensive income | | | ($ millions) | ||||||
Net underwriting income | | | $— | | | $— | | | $— |
Net investment income – Fortitude Re funds withheld assets | | | 1,775 | | | 1,427 | | | 1,598 |
Net realized losses on Fortitude Re funds withheld assets: | | | | | | | |||
Net realized gains (losses) – Fortitude Re funds withheld assets | | | 924 | | | 1,002 | | | 262 |
Net realized losses – Fortitude Re embedded derivatives | | | (687) | | | (3,978) | | | (5,167) |
Net realized losses on Fortitude Re funds withheld assets | | | 237 | | | (2,976) | | | (4,905) |
(Loss) income before income tax benefit | | | 2,012 | | | (1,549) | | | (3,307) |
Income tax benefit (expense) | | | (423) | | | 325 | | | 694 |
Net (loss) income | | | 1,589 | | | (1,224) | | | (2,613) |
Change in unrealized appreciation of all other investments | | | (1,488) | | | 1,165 | | | 2,479 |
Comprehensive income (loss) | | | $101 | | | $(59) | | | $(134) |
| | As of December 31, 2021 | ||||
| | $ | | | % | |
| | ($ millions) | ||||
Investment portfolio by asset class (excluding Fortitude Re funds withheld assets) | | | | | ||
U.S. government and government sponsored entities | | | $1,255 | | | 0.6% |
Obligations of states, municipalities and political subdivisions | | | 7,240 | | | 3.3% |
Non-U.S. governments | | | 5,579 | | | 2.5% |
Corporate debt | | | 118,715 | | | 53.5% |
RMBS | | | 13,850 | | | 6.2% |
CMBS | | | 10,311 | | | 4.6% |
ABS/CLO | | | 14,438 | | | 6.5% |
Total fixed income available for sale | | | 171,388 | | | 77.2% |
Other bond securities | | | 489 | | | 0.2% |
Equity securities | | | 241 | | | 0.1% |
Mortgage and other loans receivable | | | 35,829 | | | 16.1% |
Other invested assets | | | 8,760 | | | 3.9% |
Short-term investments | | | 5,421 | | | 2.5% |
Total | | | $222,128 | | | 100.0% |
• | developing and implementing our company-wide credit policies and procedures; |
• | approving delegated credit authorities to our credit executives and qualified credit professionals; |
• | developing methodologies for quantification and assessment of credit risks; |
• | managing a system of credit and program limits, as well as the approval process for credit transactions, above limit exposures, and concentrations of risk that may exist or be incurred; |
• | evaluating, monitoring, reviewing and reporting of credit risks and concentrations regularly with senior management; and |
• | approving appropriate credit reserves, credit-related other-than-temporary impairments and corresponding methodologies for all credit portfolios. |
• | disclosure obligations; |
• | a duty to establish, maintain, and follow policies and procedures intended to comply with the exemption; and |
• | a duty to perform an annual retrospective review for compliance with the exemption. |
Name | | | Age | | | Position |
Peter Zaffino | | | 55 | | | Chairman of the Board |
Adam Burk | | | 45 | | | Director |
Alan Colberg* | | | 60 | | | Director |
Lucy Fato | | | 55 | | | Director |
Shane Fitzsimons | | | 54 | | | Director |
Jonathan Gray | | | 52 | | | Director |
Marilyn Hirsch | | | 53 | | | Director |
Christopher Lynch | | | 64 | | | Director |
Mark Lyons | | | 65 | | | Director |
Elaine Rocha | | | 49 | | | Director |
Amy Schioldager | | | 59 | | | Director |
Patricia Walsh* | | | 56 | | | Director |
Kevin Hogan | | | 59 | | | Director, President and Chief Executive Officer |
Elias Habayeb | | | 49 | | | Executive Vice President and Chief Financial Officer |
Todd Solash | | | 46 | | | Executive Vice President and President of Individual Retirement and Life Insurance |
Katherine Anderson | | | 59 | | | Executive Vice President and Chief Risk Officer |
David Ditillo | | | 46 | | | Executive Vice President and Chief Information Officer |
Terri Fiedler | | | 58 | | | Executive Vice President and President of Financial Distributors |
Amber Miller | | | 50 | | | Executive Vice President and Chief Auditor |
Christine Nixon | | | 57 | | | Executive Vice President and General Counsel |
Jonathan Novak | | | 50 | | | Executive Vice President and President of Institutional Markets |
Elizabeth Palmer | | | 58 | | | Executive Vice President and Chief Marketing Officer |
Sabra Purtill | | | 59 | | | Executive Vice President and Chief Investment Officer |
Sabyasachi Ray | | | 57 | | | Executive Vice President and Chief Operations Officer |
Robert Scheinerman | | | 57 | | | Executive Vice President and President of Group Retirement |
Alan Smith | | | 54 | | | Executive Vice President and Chief Human Resources Officer |
* | Each of these director nominees is expected to be appointed to our Board prior to the IPO. |
• | the requirement that a majority of our Board consists of independent directors; |
• | the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors; |
• | the requirement that we have a compensation committee that is composed entirely of independent directors; and |
• | the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees. |
Named Executive Officer | | | Title as of December 31, 2021 |
Kevin T. Hogan | | | Chief Executive Officer |
Elias F. Habayeb(1) | | | Executive Vice President and Chief Financial Officer |
Todd P. Solash | | | Chief Executive Officer, Individual Retirement and Life Insurance |
Robert J. Scheinerman | | | Chief Executive Officer, Group Retirement |
Geoffrey N. Cornell(2) | | | Former Chief Investment Officer |
Thomas J. Diemer(3) | | | Former Executive Vice President and Chief Financial Officer |
(1) | Mr. Habayeb was appointed Executive Vice President and Chief Financial Officer of Corebridge effective as of November 19, 2021. |
(2) | Mr. Cornell ceased to be our Chief Investment Officer on March 31, 2022. |
(3) | Mr. Diemer served as our Executive Vice President and Chief Financial Officer through November 19, 2021 and continued to provide services to the Company in an advisory capacity until April 1, 2022. |
Principle | | | Component | | | Application |
Attract and retain the best talent | | | Offer market-competitive compensation opportunities to attract and retain the best employees and leaders for AIG’s various business needs | | | ✔ Compensation levels set with reference to market data for talent peers with relevant experience and skillsets in the insurance and financial services industries where AIG competes for talent |
Principle | | | Component | | | Application |
Pay for performance | | | Create a pay for performance culture by offering short-term incentive (“STI”) and long-term incentive (“LTI”) compensation opportunities that reward employees for individual contributions and business performance Provide a market-competitive, performance-driven compensation structure through a four-part program that consists of base salary, STI, LTI and benefits | | | ✔ Majority of compensation is variable and at-risk ✔ Incentives tied to AIG performance, business performance and individual contributions ✔ Objective performance measures and goals used, which are clearly disclosed ✔ Compensation provides significant upside and downside potential for superior performance and under performance |
Align interests with AIG shareholders | | | Motivate all AIG employees to deliver long-term, sustainable and profitable growth, while balancing risk to create long-term, sustainable value for shareholders Align the long-term economic interests of key employees with those of AIG’s shareholders by ensuring that a meaningful component of their compensation is provided in equity Avoid incentives that encourage employees to take unnecessary or excessive risks that could threaten the value or reputation of AIG by rewarding both annual and long-term performance Maintain strong compensation best practices by meeting evolving standards of compensation governance and complying with regulations applicable to employee compensation | | | ✔ Majority of compensation is equity-based ✔ Executives subject to risk management policies, including a clawback policy and anti- hedging and pledging policies ✔ Performance goals are set with rigorous standards commensurate with both the opportunity and AIG’s risk guidelines ✔ Annual risk assessments evaluate compensation plans to ensure they appropriately balance risk and reward ✔ Follow evolving compensation best practices through engagement with outside consultants and peer groups |
What AIG Does: | | | What AIG Avoids: |
✔ Pay for performance ✔ Deliver majority of executive compensation in the form of at-risk, performance-based pay ✔ Align performance objectives with AIG’s strategy ✔ Engage with AIG’s shareholders on matters including executive compensation and governance ✔ Prohibit pledging and hedging of AIG securities ✔ Cap payout opportunities for named executive officers under AIG incentive plans ✔ Maintain a robust clawback policy ✔ Maintain double-trigger change-in-control benefits ✔ Conduct annual compensation risk assessment ✔ Engage an independent compensation consultant and consult outside legal advisors | | | ✘ No tax gross-ups other than for tax equalization and relocation benefits ✘ No excessive perquisites, benefits or pension payments ✘ No reloading or repricing of stock options ✘ No equity grants below 100% of fair market value ✘ No dividends or dividend equivalents vest unless and until long-term incentive awards vest |
• | Provides perspective and data reflecting compensation levels and insight into pay practices |
• | Comprises companies of a similar size and business model as AIG that draw from the same pool of talent as AIG |
The Allstate Corporation | | | CIGNA Corporation | | | The Progressive Corporation |
American Express Company | | | Citigroup Inc. | | | Prudential Financial Inc. |
Bank of America Corporation | | | JPMorgan Chase & Co | | | The Travelers Companies, Inc. |
BlackRock, Inc. | | | Marsh & McLennan Companies, Inc. | | | U.S. Bancorp |
Capital One Financial Corporation | | | Manulife Financial Corp. | | | Wells Fargo & Company |
Chubb Limited | | | MetLife Inc. | | |
2021 Compensation Component | | | Kevin T. Hogan | | | Elias F. Habayeb | | | Todd P. Solash | | | Robert J. Scheinerman | | | Geoffrey N. Cornell | | | Thomas J. Diemer |
Base Salary | | | 1,250,000 | | | 800,000 | | | $950,000 | | | $650,000 | | | $900,000 | | | $500,000 |
Target STI | | | 2,250,000 | | | 1,050,000 | | | $1,500,000 | | | $820,000 | | | $1,100,000 | | | $700,000 |
Target LTI | | | 4,000,000 | | | 1,200,000 | | | $2,000,000 | | | $980,000 | | | $1,500,000 | | | $800,000 |
Target Direct Compensation | | | 7,500,000 | | | 3,050,000 | | | $4,450,000 | | | $2,450,000 | | | $3,500,000 | | | $2,000,000 |
Performance Metric | | | Threshold (50%) | | | Target (100%) | | | Stretch (125%) | | | Maximum (150%) | | | Actual | | | Achieved | | | Weighting | | | % Achieved (Weighted)(1) |
Life and Retirement Normalized Return on Adjusted Segment Common Equity | | | 11.0% | | | 12.9% | | | 13.9% | | | 14.8% | | | 13.2% | | | 108% | | | 70% | | | 76% |
Life and Retirement GOE (Net)(2) | | | $1,694M | | | $1,613M | | | $1,553M | | | $1,493M | | | $1,601M | | | 105% | | | 30% | | | 32% |
Life and Retirement Quantitative Performance Score: | | | 107% |
(1) | Components in this column do not sum to the total due to rounding. |
(2) | The GOE (Net) was determined inclusive of the incremental STI funding incurred for achieving the relevant goal. Accordingly, the 2021 GOE (Net) was $1,597 million prior to adding the incremental STI funding of $4.4 million which resulted in revised GOE (Net) of $1,601 million. |
| | 2021 Target STI Award | | | Business Performance Score | | | Individual Performance | | | 2021 Actual STI Award | |
Kevin T. Hogan | | | $2,250,000 | | | 107% | | | 100% | | | $2,407,500 |
Elias F. Habayeb | | | $1,050,000 | | | 137% | | | 111% | | | $1,600,000 |
| | 2021 Target STI Award | | | 2021 Actual STI Award | |
Todd P. Solash | | | $1,500,000 | | | $1,725,000 |
Robert J. Scheinerman | | | $820,000 | | | $984,000 |
Geoffrey N. Cornell | | | $1,100,000 | | | $1,100,000 |
Thomas J. Diemer | | | $700,000 | | | $700,000 |
• | For Mr. Hogan: Performance Share Units (“PSUs”) 50%, Restricted Stock Units (“RSUs”) 25% and stock options 25% |
• | For Messrs. Habayeb, Solash, Scheinerman, Cornell and Diemer: RSUs 75% and stock options 25% |
Named Executive Officer | | | 2021 Target LTI Value | | | 2021 Individual Modifier | | | 2021 Actual LTI Grant Value |
Kevin T. Hogan | | | $4,000,000 | | | 100% | | | $4,000,000 |
Elias F. Habayeb | | | $1,200,000 | | | 100% | | | $1,200,000 |
Todd P. Solash | | | $2,000,000 | | | 100% | | | $2,000,000 |
Robert J. Scheinerman | | | $980,000 | | | 100% | | | $980,000 |
Geoffrey N. Cornell | | | $1,500,000 | | | 100% | | | $1,600,000 |
Thomas J. Diemer | | | $800,000 | | | 100% | | | $800,000 |
• | Improvement in Accident Year Combined Ratio, As Adjusted, including Average Annual Losses (“Adjusted AYCR inc. AALS”), measured annually |
○ | Metric capped at target if Accident Year Combined Ratio, as Adjusted, including Average Annual Losses is higher at the end of the three-year performance period than it was immediately preceding the start of the performance period |
• | Core Normalized BVPS growth, measured annually |
• | Core Normalized Return on Attributed Common Equity, measured in the third year |
Metrics (Measurement Basis) | | | Performance Goal (% Payout) | | | Relevant Metrics | | | Earned Performance | | | Total Earned Performance | ||||||||||||||||||
| Thres. (50%) | | | Target (100%) | | | Max. (200%) | | | FY’19A | | | FY’20A | | | FY’21A | | | FY’19A | | | FY’20A | | | FY’21A | | | Inception-to- Date | ||
Adjusted AYCR incl. AALs (Annual and Three- Year Improvement) | | | 0.5pt | | | 1pt | | | 2pts | | | 4.5pts | | | 1.9pts | | | 3.7pts | | | 200% | | | 188% | | | 200% | | | 196% |
Core Normalized BVPS (Annual Growth) | | | 5% | | | 10% | | | 15% | | | 16.6% | | | 12.9% | | | 19.3% | | | 200% | | | 158% | | | 200% | | | 186% |
Messrs. Habayeb, Solash, Scheinerman, Cornell and Diemer | | | | | | | | | | | | | | | 200 | | | 173 | | | 200 | | | 191 | ||||||
Core Normalized ROCE (FY’21) | | | 9% | | | 10% | | | 11% | | | 8.6% | | | 6.7% | | | 7.4% | | | N/A | | | N/A | | | — | | | — |
Mr. Hogan(1) | | | | | | | | | | | | | | | 200 | | | 173 | | | 80 | | | 127 |
(1) | For Mr. Hogan, 2019 PSU award is capped at 100% based on AIG’s TSR at the end of the performance period 12/31/2021. |
Qualifying Termination | | | • | | | Termination by AIG without “cause” |
| • | | | Covered executive resigns for “good reason”, including for qualifying executives after a “change in control” | ||
Severance Payment | | | • | | | Pre-determined multiplier applied to salary and three-year average of actual STI payments |
| • | | | Severance multiple is 1.0 or 1.5 depending on an executive’s grade | ||
| • | | | Severance multiple increases to 1.5 or 2.0 for a qualifying termination within two years following a change in control |
Management | | | CMRC | | | AIG Inc. Board |
• AIG Inc.’s Chairman and Chief Executive Officer approves compensation for our named executive officers | | | • Reviews compensation for our named executive officers • Oversees AIG’s compensation and benefit programs • Oversees AIG’s management development and succession planning programs for executive management • Oversees the assessment of risks related to AIG’s compensation programs • Reviews periodic updates provided on initiatives and progress in human capital, including diversity, equity and inclusion • Produces AIG’s Compensation Discussion and Analysis report on executive compensation • Engages an independent consultant | | | • Approves CMRC recommendations on compensation philosophy, and the development and implementation of AIG’s compensation programs • Approves CMRC recommendations on AIG’s equity plans |
• Provides views on: • How AIG’s compensation program and proposals for senior executives compare to market practices in the insurance industry, financial services and more broadly; • “Best practices” and how they apply to AIG; • The design and implementation of current and proposed executive compensation programs; | | | • Responds to questions raised by the CMRC and other stakeholders in the executive compensation process; • Participates in discussions pertaining to compensation and risk, assessing the process and conclusions; and • Participates in discussions on performance goals that are proposed by management for the CMRC’s approval. |
• | whether the plan design or administration may encourage excessive or unnecessary risk-taking; |
• | whether the plan has appropriate safeguards in place to discourage fraudulent behavior; |
• | whether the plan incorporates appropriate risk mitigants to lower risk (including deferrals, clawback conditions (see the section titled “—AIG Clawback Policy” below) and capped payouts); and |
• | whether payments are based on pre-established performance goals, including risk-adjusted metrics. |
Covered Employees | | | • All AIG executive officers • Any other AIG employees as determined by the CMRC |
Covered Compensation | | | • Generally, includes any bonus, equity or equity-based award, or any other incentive compensation granted since 2013 • Compensation paid, and awards granted, while a covered employee is subject to this clawback policy |
Triggering Events | | | • Material financial restatement • Award or receipt of covered compensation based on materially inaccurate financial statements or performance metrics that are materially inaccurately determined • Failure of risk management, including a supervisory role or material violation of AIG’s risk policies • An action or omission that results in material financial or reputational harm to AIG |
| | ||
CMRC Authority | | | • Determining whether a triggering event has occurred • Ability to require forfeiture or repayment of all or any portion of any unpaid covered compensation or covered compensation paid in the 12 months preceding the triggering event • The 12-month time horizon will be extended to a longer period if required by any applicable statute or government regulation |
• | Adjusted Pre-tax Income (APTI) is derived by excluding the items set forth below from income from continuing operations before income tax. This definition is consistent across our segments. These items |
• | changes in fair value of securities used to hedge guaranteed living benefits; |
• | changes in benefit reserves and deferred policy acquisition costs, value of business acquired, and deferred sales inducements related to net realized gains and losses; |
• | changes in the fair value of equity securities; |
• | net investment income on Fortitude Reinsurance Company Ltd. (Fortitude Re) funds withheld assets held by AIG in support of Fortitude Re’s reinsurance obligations to AIG post deconsolidation of Fortitude Re (Fortitude Re funds withheld assets); |
• | following deconsolidation of Fortitude Re, net realized gains and losses on Fortitude Re funds withheld assets; |
• | loss (gain) on extinguishment of debt; |
• | all net realized gains and losses except earned income (periodic settlements and changes in settlement accruals) on derivative instruments used for non-qualifying (economic) hedging or for asset replication. Earned income on such economic hedges is reclassified from net realized gains and losses to specific APTI line items based on the economic risk being hedged (e.g. net investment income and interest credited to policyholder account balances); |
• | income or loss from discontinued operations; |
• | net loss reserve discount benefit (charge); |
• | pension expense related to lump sum payments to former employees; |
• | net gain or loss on divestitures; |
• | non-operating litigation reserves and settlements; |
• | restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization; |
• | the portion of favorable or unfavorable prior year reserve development for which we have ceded the risk under retroactive reinsurance agreements and related changes in amortization of the deferred gain; |
• | integration and transaction costs associated with acquiring or divesting businesses; |
• | losses from the impairment of goodwill; and |
• | non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles. |
• | Adjusted After-tax Income (AATI) attributable to AIG common shareholders is derived by excluding the tax effected APTI adjustments described above, dividends on preferred stock, noncontrolling interest on net realized gains (losses), other non-operating expenses and the following tax items from net income attributable to AIG: |
• | deferred income tax valuation allowance releases and charges; |
• | changes in uncertain tax positions and other tax items related to legacy matters having no relevance to our current businesses or operating performance; and |
• | net tax charge related to the enactment of the Tax Cuts and Jobs Act. |
• | AIG Return on Common Equity (ROCE)—Adjusted After-tax Income Excluding Accumulated Other Comprehensive Income (AOCI) adjusted for the cumulative unrealized gains and losses related to Fortitude Re funds withheld assets and Deferred Tax Assets (DTA) (Adjusted Return |
• | Adjusted After-tax Income Attributable to Life and Retirement is derived by subtracting attributed interest expense, income tax expense and attributed dividends on preferred stock from APTI. Attributed debt and the related interest expense and dividends on preferred stock are calculated based on our internal allocation model. Tax expense or benefit is calculated based on an internal attribution methodology that considers among other things the taxing jurisdiction in which the segments conduct business, as well as the deductibility of expenses in those jurisdictions. |
• | Core Adjusted Attributed Common Equity is an attribution of AIG’s Adjusted Common Shareholders’ Equity to these segments based on our internal capital model, which incorporates the segments’ respective risk profiles. Adjusted Attributed Common Equity represents our best estimates based on current facts and circumstances and will change over time. |
• | Life and Retirement Adjusted Segment Common Equity is based on segment equity adjusted for the attribution of debt and preferred stock (Segment Common Equity) and is consistent with AIG’s Adjusted Common Shareholders’ Equity definition. |
• | Core Return on Common Equity—Adjusted After-tax Income (Adjusted Return on Attributed Common Equity) is used to show the rate of return on Adjusted Attributed Common Equity. Adjusted Return on Attributed Common Equity is derived by dividing actual or annualized Adjusted After-tax Income by average Adjusted Attributed Common Equity. |
• | Life and Retirement Return on Adjusted Segment Common Equity—Adjusted After-tax Income (Return on Adjusted Segment Common Equity) is used to show the rate of return on Adjusted Segment Common Equity. Return on Adjusted Segment Common Equity is derived by dividing actual or annualized Adjusted After-tax Income by Average Adjusted Segment Common Equity. |
• | Core Normalized Return on Attributed Common Equity further adjusts Adjusted Return on Attributed Common Equity for the effects of certain volatile or market-related items. We believe this measure is useful to investors for performance management because it presents the trends in Adjusted Return on Attributed Common Equity without the impact of certain items that can experience volatility in our short-term results. Normalized Return on Attributed Common Equity is derived by excluding the following tax-adjusted effects from Adjusted Return on Attributed Common Equity: the difference between actual and expected (1) catastrophe losses, (2) alternative investment returns, (3) Direct Investment Book and Global Capital Markets returns, (4) fair value changes on fixed maturity securities; update of actuarial assumptions; and prior year loss reserve development. |
• | Life and Retirement Normalized Return on Adjusted Segment Common Equity further adjusts Return on Adjusted Segment Common Equity for the effects of certain volatile or market-related items. We believe this measure is useful to investors for performance management because it presents the trends in Return on Adjusted Segment Common Equity without the impact of certain items that can experience volatility in our short-term results. Normalized Return on Adjusted Segment Common Equity is derived by excluding the following tax-adjusted effects from Return on Adjusted Segment |
• | Ratios: We, along with most property and casualty insurance companies, use the loss ratio, the expense ratio and the combined ratio as measures of underwriting performance. These ratios are relative measurements that describe, for every $100 of net premiums earned, the amount of losses and loss adjustment expenses (which for General Insurance excludes net loss reserve discount), and the amount of other underwriting expenses that would be incurred. A combined ratio of less than 100 indicates underwriting income and a combined ratio of over 100 indicates an underwriting loss. Our ratios are calculated using the relevant segment information calculated under GAAP, and thus may not be comparable to similar ratios calculated for regulatory reporting purposes. The underwriting environment varies across countries and products, as does the degree of litigation activity, all of which affect such ratios. In addition, investment returns, local taxes, cost of capital, regulation, product type and competition can have an effect on pricing and consequently on profitability as reflected in underwriting income and associated ratios. |
• | Accident year loss and Accident year combined ratios, as adjusted (Accident year loss ratio, ex-CAT and Accident year combined ratio, ex-CAT) exclude catastrophe losses (CATs) and related reinstatement premiums, prior year development (PYD), net of premium adjustments, and the impact of reserve discounting. Natural catastrophe losses are generally weather or seismic events, in each case, having a net impact on AIG in excess of $10 million and man-made catastrophe losses, such as terrorism and civil disorders that exceed the $10 million threshold. We believe that as adjusted ratios are meaningful measures of our underwriting results on an ongoing basis as they exclude catastrophes and the impact of reserve discounting which are outside of management’s control. We also exclude prior year development to provide transparency related to current accident year results. Underwriting ratios are computed as follows: |
• | Loss Ratio = Loss and loss adjustment expenses incurred ÷ Net premiums earned (NPE) |
• | Acquisition Ratio = Total acquisition expenses ÷ NPE |
• | General Operating Expense Ratio = General operating expenses ÷ NPE |
• | Expense Ratio = Acquisition ratio + General operating expense ratio |
• | Combined Ratio = Loss ratio + Expense ratio |
• | CATs and Reinstatement Premiums = [Loss and loss adjustment expenses incurred – (CATs)] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes] – Loss ratio |
• | Accident Year Loss Ratio, As Adjusted (AYLR ex-CAT) = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes +/(-) Prior year premiums + Adjustment for ceded premium under reinsurance contracts related to prior accident years] |
• | Accident Year Combined Ratio, As Adjusted (AYCR ex-CAT) = AYLR ex-CAT + Expense ratio |
• | Prior Year Development net of reinsurance and prior year premiums = [Loss and loss adjustment expenses incurred – CATs – PYD] ÷ [NPE +/(-) Reinstatement premiums related to catastrophes +/(-) Prior year premiums] – Loss ratio – CATs and reinstatement premiums ratio |
| | Twelve Months Ended December 31, | |||||||
Underwriting Ratios | | | 2021 | | | 2020 | | | 2019 |
Loss ratio | | | 64.2 | | | 71.0 | | | 65.2 |
Catastrophe losses and reinstatement premiums | | | (5.4) | | | (10.3) | | | (4.8) |
Prior year development, net of reinsurance and prior year premiums | | | 0.6 | | | 0.1 | | | 1.1 |
Adjustment for ceded premiums under reinsurance contracts and other | | | — | | | — | | | 0.1 |
Accident year loss ratio, as adjusted | | | 59.4 | | | 60.8 | | | 61.6 |
| | Twelve Months Ended December 31, | |||||||
Underwriting Ratios | | | 2021 | | | 2020 | | | 2019 |
Acquisition ratio | | | 19.6 | | | 20.4 | | | 21.8 |
General operating expense ratio | | | 12.0 | | | 12.9 | | | 12.6 |
Expense ratio | | | 31.6 | | | 33.3 | | | 34.4 |
Combined ratio | | | 95.8 | | | 104.3 | | | 99.6 |
Accident year combined ratio, as adjusted* | | | 91.0 | | | 94.1 | | | 96.0 |
* | In addition, for purposes of performance metrics, Accident Year Combined Ratio, as Adjusted was further adjusted for certain business factors. |
• | Accident Year Combined Ratio, As Adjusted, including Average Annual Losses is derived by adding the average annual losses (AAL) expressed as a percentage of net premiums earned, to the Accident Year Combined Ratio, As Adjusted. The AAL is the mean of the probabilistic expected catastrophe loss distribution that is calculated based on our catastrophe model. |
• | Combined Ratio Improvement Relative to Peers represents General Insurance’s combined ratio compared to peers’ combined ratio computed using a weighted average based on the respective net premiums earned for each peer. |
• | Life and Retirement GOE (Net) represents GOE on an adjusted pre-tax income basis normalized for certain legal settlements and other business factors. |
• | Core Normalized Book Value per Common Share is derived by dividing Core Adjusted Attributed Common Equity adjusted for cumulative dividends paid to common shareholders over the three-year LTI performance period and the tax-adjusted effects of (1) inception to date changes in the Adverse Development Cover reinsurance agreement deferred gain (including inception to date amortization related to the deferred gain) resulting from changes in the underlying loss reserves, (2) the difference between actual and expected catastrophe losses, and (3) the cumulative effect of changes in accounting principles, by total common shares outstanding. |
• | Relative Tangible Book Value Per Common Share (BVPS) represents Tangible book value per common share compared to peers’ Tangible book value per common share. Tangible book value per common share is derived by dividing Total AIG common shareholders’ equity, excluding goodwill, value of business acquired, value of distribution channel acquired and other intangible assets, by total common shares outstanding. |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($)(1) | | | Stock Awards ($)(2) | | | Option Awards ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | Change in Pension Value ($)(4) | | | All Other Compensation ($)(5) | | | Total ($) |
Kevin T. Hogan | | | 2021 | | | 1,250,000 | | | | | 3,262,558 | | | 999,999 | | | 2,407,500 | | | 0 | | | 85,188 | | | 8,005,245 | |
Elias F. Habayeb | | | 2021 | | | 758,655 | | | | | 1,168,373 | | | 374,989 | | | 1,600,000 | | | 0 | | | 26,373 | | | 3,928,390 | |
Todd P. Solash | | | 2021 | | | 950,000 | | | 1,395,000 | | | 1,563,786 | | | 500,000 | | | 1,725,000 | | | 0 | | | 26,423 | | | 6,160,209 |
Robert J. Scheinerman | | | 2021 | | | 650,000 | | | 375,000 | | | 766,238 | | | 244,998 | | | 984,000 | | | 0 | | | 26,373 | | | 3,046,609 |
Geoffrey N. Cornell | | | 2021 | | | 755,962 | | | 500,000 | | | 2,311,038 | | | 375,000 | | | 1,100,000 | | | 0 | | | 26,373 | | | 5,068,373 |
Thomas J. Diemer | | | 2021 | | | 500,000 | | | 250,000 | | | 625,514 | | | 200,000 | | | 700,000 | | | 2,029 | | | 26,373 | | | 2,303,916 |
(1) | Amounts include the first installment of the April 2020 Leadership Continuity Awards that were paid in May. The second installment will be paid in May 2022. For Mr. Solash, amount includes first installment of the April 2020 Leadership Continuity Award that was paid in May ($375,000), the last installment of his sign-on bonus paid in June ($20,000) and the first installment of his November 2020 Leadership Continuity Award paid in November ($1,000,000). The second installment of his November 2020 leadership continuity award will be paid in November 2022. |
(2) | 2021 Stock and Option Awards. The “Stock Awards” column represents the grant date fair value of (i) the 2021 PSUs for Mr. Hogan based on target performance, which was the probable outcome of the performance conditions; and (ii) 2021 RSUs that vest based on continued service through the performance period. See “—Compensation Discussion and Analysis—2021 Compensation Decisions and Outcomes—AIG’s 2021 Long-Term Incentive Awards” for further information. The 2021 PSUs and 2021 RSUs, together with the 2021 stock options represented in the “Option Awards” column, comprise the 2021 LTI awards and were granted under the LTI plan. For Mr. Hogan the grant date fair value of the 2021 PSUs at the target and maximum levels of performance are $2,220,034 and $4,440,068 respectively. |
(3) | 2021 Non-Equity Incentive Plan Compensation. The amounts represent the awards earned under the AIG STI plan for 2021 performance as determined in the first quarter of 2022. 100% of each award was vested and paid in February 2022. See “—Compensation Discussion and Analysis—2021 Compensation Decisions and Outcomes—2021 Short-Term Incentive Awards” for further information. |
(4) | The amount in this column represents the total change of the actuarial present value of the accumulated benefit, including any payments made during the year, under AIG’s defined benefit (pension) plans, including the Qualified Retirement Plan and the Non-Qualified Retirement Plan. These Plans are described in “—Post-Employment Compensation—Pension Benefits.” |
(5) | (a) Perquisites. This column includes the incremental costs of perquisites and benefits. The following table details the incremental cost to AIG of perquisites received by Mr. Hogan in 2021. |
Name | | | Personal Use of Company Pool Cars ($)(i) | | | Flexible PerquisiteAllowance ($) (ii) | | | Other ($)(iii) | | | Total ($) |
Kevin T. Hogan | | | 6,378 | | | 35,000 | | | 17,437 | | | 58,815 |
(i) | Amount in this column includes the incremental costs of driver overtime compensation, fuel and maintenance attributable to personal use of company pool cars. |
(ii) | Amount in this column reflects payment of the annual cash perquisite allowance of $35,000, which the CMRC approved when it eliminated perquisites such as financial and estate planning. |
(iii) | Amount in this column reflects the cost of tax preparation services related to a prior international assignment. |
(b) | Other Benefits. |
| | | | Estimated Future Payouts Under Non-Equity Plan Awards(1) | | | Estimated Future Payouts Under Equity Plan Awards2) | | | All Other Stock Awards (# of AIG Shares or Units)(3) | | | All Other Option Awards (# of Securities Underlying Options)(4) | | | Exercise or Base Price of Option Awards ($/Sh)(4) | | | Grant Date Fair Value of Equity Awards ($)(5) | ||||||||||||||
Name | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | |||||||||||
Kevin T. Hogan | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
2021 STI | | | 2/22/2021 | | | 0 | | | 2,250,000 | | | 4,500,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
2021 PSUs | | | 3/11/2021 | | | — | | | — | | | — | | | 21,281 | | | 42,562 | | | 85,124 | | | — | | | — | | | — | | | 2,220,034 |
2021 RSUs | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 23,640 | | | — | | | — | | | 1,042,524 |
2021 Options | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 85,470 | | | 44.10 | | | 999,999 |
Elias F. Habayeb | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
2021 STI | | | 2/22/2021 | | | 0 | | | 1,050,000 | | | 2,100,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
2021 RSUs | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 21,276 | | | — | | | — | | | 938,272 |
2021 Options | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 25,641 | | | 44.10 | | | 300,000 |
2021 RSUs | | | 3/4/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 4,973 | | | — | | | — | | | 230,101 |
2021 Options | | | 3/4/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 6,355 | | | 46.27 | | | 74,989 |
Todd P. Solash | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
2021 STI | | | 2/22/2021 | | | 0 | | | 1,500,000 | | | 3,000,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
2021 RSUs | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 35,460 | | | — | | | — | | | 1,563,786 |
2021 Options | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 42,375 | | | 44.10 | | | 500,000 |
Robert J. Scheinerman | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
2021 STI | | | 2/22/2021 | | | 0 | | | 820,000 | | | 1,640,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
2021 RSUs | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 17,375 | | | — | | | — | | | 766,238 |
2021 Options | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 20,940 | | | 44.10 | | | 244,998 |
Thomas Diemer | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
2021 STI | | | 2/22/2021 | | | 0 | | | 700,000 | | | 1,400,000 | | | | | | | | | | | | | | | |||||||
2021 RSUs | | | 2/22/2021 | | | | | | | | | | | | | | | 14,184 | | | | | | | 625,514 | ||||||||
2021 Options | | | 2/22/2021 | | | | | | | | | | | | | | | | | 17,094 | | | 44.10 | | | 200,000 | |||||||
Geoffrey N. Cornell | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
2021 STI | | | 5/26/2021 | | | 0 | | | 1,100,000 | | | 2,200,000 | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
2021 RSUs | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 16,548 | | | — | | | — | | | 729,767 |
2021 Options | | | 2/22/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 17,094 | | | 44.10 | | | 200,000 |
2021 RSUs | | | 5/26/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 20,185 | | | — | | | — | | | 1,036,903 |
2021 RSUs | | | 5/26/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | 10,597 | | | — | | | — | | | 544,368 |
2021 Options | | | 5/26/2021 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 16,129 | | | 51.37 | | | 175,000 |
(1) | Amounts shown reflect the range of possible cash payouts under the AIG STI plan for 2021 performance. Actual amounts earned, as determined in the first quarter of 2022, are reflected in the 2021 Summary Compensation Table under Non-Equity Incentive Plan Compensation. For more information on the 2021 STI awards, including the applicable performance metrics, please see “— Compensation Discussion and Analysis—2021 Compensation Decisions and Outcomes—2021 Short-Term Incentive Awards.” |
(2) | Amounts shown reflect the potential range of 2021 PSUs that were granted and may be earned under the LTI plan. Actual amounts earned are based on achieving pre-established goals across three financial objectives over the 2021-2023 performance period. Results will be certified by the CMRC in the first quarter of 2024. For more information on the 2021 PSUs including the applicable performance metrics please see “—Compensation Discussion and Analysis—2021 Compensation Decisions and Outcomes—AIG’s 2021 Long-Term Incentive Awards.” Holders of 2021 PSUs are entitled to dividend |
(3) | Amounts shown reflect the grant of 2021 RSUs made under the AIG LTI plan. For more information on these awards, please see “—Compensation Discussion and Analysis—2021 Compensation Decisions and Outcomes—AIG's 2021 Long-Term Incentive Awards.” Holders of 2021 RSUs are entitled to dividend equivalent rights in the form of cash beginning with the first dividend record date following the applicable grant date, which are subject to the same vesting conditions as the related RSUs and are paid if and when such related shares are delivered. |
(4) | Amounts shown reflect the grant of 2021 stock options made under the AIG LTI plan. For more information on these awards, please see “—Compensation Discussion and Analysis—2021 Compensation Decisions and Outcomes—AIG's 2021 Long-Term Incentive Awards.” Stock options granted in 2021 have an exercise price equal to the closing price of the underlying shares of AIG common stock on the NYSE on the grant date. |
(5) | Amounts shown represent the grant date fair value of the awards determined in accordance with FASB ASC Topic 718. The fair value of time-vesting RSUs was based on the AIG common stock closing price on the grant date. The fair value of the options granted in 2021 was estimated on the grant date using the Black-Scholes model. The following assumptions were used for stock options granted: |
| | February 22, 2021 Grant | | | March 4, 2021 Grant | | | May 26, 2021 Grant | |
Expected annual dividend yield (a) | | | 2.90% | | | 2.77% | | | 2.49% |
Expected Volatility (b) | | | 36.85% | | | 34.80% | | | 28.25% |
Risk-free interest rate (c) | | | 0.94% | | | 1.04% | | | 1.14% |
Expected Term (d) | | | 6.43 years | | | 6.41 years | | | 6.30 years |
(a) | The dividend yield is the projected annualized AIG dividend yield estimated by Bloomberg Professional service as of the valuation date. |
(b) | The expected volatility is based on the implied volatility of 24 months stock option estimated by the Bloomberg Professional service as of the valuation date. |
(c) | The risk-free interest rate is the continuously compounded interest rate for the term between the valuation date and the expiration date that is assumed to be constant and equal to the interpolated value between the closest data points on the U.S. dollar LIBOR-swap curve as of the valuation date. |
(d) | The contractual term is 10 years from the date of grant. |
| | Option Awards(1) | | | | | Stock Awards | ||||||||||||||||||||||||||
Name | | | Year Granted | | | Number of Securities underlying Unexercised Options (Exercisable) | | | Number of Securities underlying Unexercised Options (Unexercisable) | | | Equity Incentive Plan Awards (Number of Securities underlying Unexercised and Unearned Options) | | | Exercise Price ($) | | | Expiration Date | | | Award Type(2) | | | Unvested (Not Subject to Performance Conditions) | | | Equity Incentive Plan Awards (Unearned and Unvested) | ||||||
| Number | | | Market Value ($)(3) | | | Number | | | Market Value ($)(3) | |||||||||||||||||||||||
Kevin Hogan | | | 2021 | | | | | 85,470 | | | | | 44.10 | | | 2/22/2031 | | | 2021 RSUs | | | 23,640 | | | 1,344,170 | | | | | ||||
| | 2020 | | | | | 116,959 | | | | | 32.43 | | | 3/11/2030 | | | 2021 PSUs | | | | | | | 21,281 | | | 1,210,038 | |||||
| | 2019 | | | | | 122,850 | | | | | 44.28 | | | 3/18/2029 | | | 2020 RSUs | | | 27,983 | | | 1,591,113 | | | | | |||||
| | 2018 | | | 125,418 | | | | | | | 55.94 | | | 3/13/2028 | | | 2020 PSUs | | | | | | | 33,721 | | | 1,917,376 | |||||
| | | | | | | | | | | | | | 2019 RSUs | | | 24,924 | | | 1,417,179 | | | | | |||||||||
| | | | | | | | | | | | | | 2019 PSUs | | | 23,172 | | | 1,317,560 | | | | | |||||||||
| | | | | | | | | | | | | | Total | | | 99,719 | | | 5,670,022 | | | 55,002 | | | 127,413 | |||||||
Elias Habayeb | | | 2021 | | | | | 6,355 | | | | | 46.27 | | | 3/4/2031 | | | 2021 RSUs | | | 26,249 | | | 1,492,518 | | | | | ||||
| | 2021 | | | | | 25,641 | | | | | 44.10 | | | 2/22/2031 | | | 2020 RSUs | | | 30,286 | | | 1,722,062 | | | | | |||||
| | 2020 | | | | | 35.087 | | | | | 32.43 | | | 3/11/2030 | | | 2019 PSUs | | | 6,494 | | | 369,249 | | | | | |||||
| | 2019 | | | | | 36,855 | | | | | 44.28 | | | 3/18/2029 | | | 2019 RSUs | | | 14,954 | | | 850,284 | | | | | |||||
| | 2018 | | | 25,083 | | | | | | | 55.94 | | | 3/13/2028 | | | Total | | | 77,983 | | | 4,434,113 | | | | | |||||
| | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | | | | | | | | | | | | | | | | | | | | | ||||||||||||
Todd Solash | | | 2021 | | | | | 42,735 | | | | | 44.10 | | | 2/22/2031 | | | 2021 RSUs | | | 35,460 | | | 2,016,256 | | | | | ||||
| | 2020 | | | | | 35,087 | | | | | 32.43 | | | 3/11/2030 | | | 2020 RSUs | | | 40,359 | | | 2,294,813 | | | | | |||||
| | 2019 | | | | | 8,000 | | | | | 53.32 | | | 6/24/2029 | | | | | | | | | | | ||||||||
| | 2019 | | | | | 27,027 | | | | | 44.28 | | | 3/18/2029 | | | 2019 RSUs | | | 14,180 | | | 806,275 | | | | | |||||
| | 2018 | | | 18,394 | | | | | | | 55.94 | | | 3/13/2028 | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | 2019 PSUs | | | 6,343 | | | 360,663 | | | | | |||||||||
| | | | | | | | | | | | | | Total | | | 96,342 | | | 5,478,066 | | | | | |||||||||
| |||||||||||||||||||||||||||||||||
Robert J. Scheinerman | | | 2021 | | | | | 20,940 | | | | | 44.10 | | | 2/22/2031 | | | 2021 RSUs | | | 17,375 | | | 987,943 | | | | | ||||
| | 2020 | | | | | 28,654 | | | | | 32.43 | | | 3/11/2030 | | | 2020 RSUs | | | 32,149 | | | 1,827,992 | | | | | |||||
| | 2019 | | | | | 6,500 | | | | | 53.32 | | | 6/24/2029 | | | | | | | | | | | ||||||||
| | 2019 | | | | | 22,113 | | | | | 44.28 | | | 3/18/2029 | | | 2019 RSUs | | | 11,583 | | | 658,609 | | | | | |||||
| | 2018 | | | 15,050 | | | | | | | 55.94 | | | 3/13/2028 | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | 2019 PSUs | | | 6,240 | | | 354,806 | | | | | |||||||||
| | | | | | | | | | | | | | Total | | | 67,347 | | | 3,829,350 | | | | | |||||||||
Geoffrey N. Cornell | | | 2021 | | | | | 16,129 | | | | | 51.37 | | | 5/26/2031 | | | 2021 RSUs | | | 47,330 | | | 2,691,184 | | | | | ||||
| | 2021 | | | | | 17,094 | | | | | 44.10 | | | 2/22/2031 | | | | | | | | | | | ||||||||
| | 2020 | | | | | 25,584 | | | | | 32.43 | | | 3/11/2030 | | | 2020 RSUs | | | 22,083 | | | 1,255,639 | | | | | |||||
| | 2019 | | | | | 24,570 | | | | | 44.28 | | | 3/18/2029 | | | 2019 RSUs | | | 16,201 | | | 921,189 | | | | | |||||
| | 2018 | | | 16,722 | | | | | | | 55.94 | | | 3/13/2028 | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | 2019 PSUs | | | 4,329 | | | 246,147 | | | | | |||||||||
| | | | | | | | | | | | | | Total | | | 89,943 | | | 5,114,159 | | | | | |||||||||
Thomas J. Diemer | | | 2021 | | | | | 17,094 | | | | | 44.10 | | | 2/22/2031 | | | 2021 RSUs | | | 14,184 | | | 806,502 | | | | | ||||
| | 2020 | | | | | 23,391 | | | | | 32.43 | | | 3/11/2030 | | | 2020 RSUs | | | 26,905 | | | 1,529,818 | | | | | |||||
| | 2019 | | | | | 24,570 | | | | | 44.28 | | | 3/18/2029 | | | 2019 RSUs | | | 12,462 | | | 708,589 | | | | | |||||
| | 2018 | | | 16,722 | | | | | | | 55.94 | | | 3/13/2028 | | | | | | | | | | | ||||||||
| | | | | | | | | | | | | | 2019 PSUs | | | 5,364 | | | 304,997 | | | | | |||||||||
| | | | | | | | | | | | | | Total | | | 58,915 | | | 3,349,907 | | | | |
(1) | Stock Options. Stock options granted in 2021, 2020 and 2019 have an exercise price equal to the closing price of the underlying shares of AIG common stock on the NYSE on the date of grant and have a 10-year term from the date of grant. All of the stock options granted in 2021 will vest in full in January 2024. All of the stock options granted in 2020 will vest in full in January 2023. All of the stock options granted in 2019 vested in full in January 2022. |
(2) | PSUs. |
(3) | Based on the closing sale price of AIG common stock on the NYSE on December 31, 2021 of $56.86 per share. |
| | Stock-Based Awards Vested in 2021(1) | ||||
Name | | | Number of Shares Acquired on Vesting | | | Value Realized on Vesting ($) |
Kevin T. Hogan | | | 77,502 | | | 2,877,649 |
Elias F. Habayeb | | | 31,284 | | | 1,161,575 |
Todd P. Solash | | | 13,583 | | | 504,337 |
Robert J. Scheinerman | | | 11,661 | | | 432,973 |
Geoffrey N. Cornell | | | 12,347 | | | 458,444 |
Thomas J. Diemer | | | 12,347 | | | 458,444 |
(1) | Represents the 2018 RSUs and 2018 PSUs, and for Mr. Habayeb his 2017 Continuity RSUs (and for all such awards, the related dividend equivalent rights) that vested in January 2021 (based on the value of the underlying shares of AIG common stock on the vesting date). |
Name | | | Plan Name | | | Years of Credited Service(1) | | | Present Value of Accumulated Benefit ($)(2) | | | Payments During 2021 ($) |
Kevin T. Hogan | | | Qualified Retirement Plan | | | 25.917 | | | 918,456 | | | 0 |
| | Non-Qualified Retirement Plan | | | 25.917 | | | 1,116,681 | | | 0 | |
| | Total | | | | | 2,035,137 | | | 0 | ||
Elias F. Habayeb | | | Qualified Retirement Plan | | | 7.917 | | | 219,587 | | | 0 |
| | Non-Qualified Retirement Plan | | | 6.917 | | | 284,924 | | | 0 | |
| | Total | | | | | 504,511 | | | 0 | ||
Todd P. Solash | | | Qualified Retirement Plan | | | n/a | | | n/a | | | n/a |
| | Non-Qualified Retirement Plan | | | n/a | | | n/a | | | n/a | |
| | Total | | | n/a | | | n/a | | | n/a | |
Robert J. Scheinerman | | | Qualified Retirement Plan | | | 11.917 | | | 383,140 | | | 0 |
| | Non-Qualified Retirement Plan | | | 11.917 | | | 105,593 | | | 0 | |
| | Total | | | | | 488,733 | | | 0 | ||
Geoffrey N. Cornell | | | Qualified Retirement Plan | | | 22.083 | | | 664,575 | | | 0 |
| | Non-Qualified Retirement Plan | | | 22.083 | | | 107,926 | | | 0 | |
| | Total | | | | | 772,501 | | | 0 | ||
Thomas J. Diemer | | | Qualified Retirement Plan | | | 1.833 | | | 35,775 | | | 0 |
| | Non-Qualified Retirement Plan | | | 1.833 | | | 64,342 | | | 0 | |
| | Total | | | | | 100,117 | | | 0 |
(1) | The named executive officers had the following years of service with AIG as of December 31, 2021: Mr. Hogan – 32.500; Mr. Habayeb – 15.333; Mr. Solash – 4.879; Mr. Scheinerman – 18.428; and Mr. Cornell – 28.605; Mr. Diemer – 8.846. |
(2) | The actuarial present values of the accumulated benefits are based on service and earnings as of December 31, 2021 (the pension plan measurement date for purposes of AIG’s financial statement reporting). The actuarial present values of the accumulated benefits under the Plans are calculated based on payment of a life annuity beginning at age 65, or current age if older. The discount rate assumption is 2.75% for the Qualified Retirement Plan. The discount rate assumption is 2.66% for the Non-Qualified Retirement Plan. The mortality assumptions are based on the Pri-2012 annuitant white collar mortality table projected using the AIG improvement scale. |
• | For qualifying terminations not in connection with a Change in Control, severance in an amount equal to the product of a multiplier times the sum of base salary and the average amount of STI paid for the preceding three completed calendar years. The multiplier is either 1 or 1.5 depending on the executive’s grade level. For qualifying terminations within two years following a Change in Control, severance in an amount equal to the product of a multiplier times the sum of base salary and the better of (a) the average amount of STI paid to the executive for the preceding three completed calendar years, or (b) the executive’s target STI for the most recently completed calendar year preceding the termination year. The multiplier is either 1.5 or 2 depending on the executive’s grade level. Each of Messrs. Diemer, Solash, Cornell and Scheinerman is eligible for the lower multiplier; and |
• | For terminations on and after April 1 of the termination year (after January 1 in the event of qualifying termination within two years following a Change in Control), a pro-rata annual STI award for the year of termination based on the participant’s target amount and actual company (and/or, if applicable, business unit or function) performance (or, for a qualifying termination within two years following a Change in Control, the greater of (i) a participant’s target amount and (ii) a participant’s STI amount determined based on actual performance), paid at the same time as such STI awards are regularly paid to similarly situated active employees. |
• | engaging in, being employed by, rendering services to or acquiring financial interests in certain businesses that are competitive with AIG for a period of six months after termination; |
• | interfering with AIG’s business relationships with customers, suppliers or consultants for a period of six months after termination; |
• | soliciting or hiring AIG employees for a period of one year after termination; |
• | making false or disparaging comments about AIG or its affiliates; and |
• | disclosing AIG’s confidential information at any time following termination. |
• | “Cause” generally means |
• | the participant’s conviction, whether following trial or by plea of guilty or nolo contendere (or similar plea), in a criminal proceeding (1) on a misdemeanor charge involving fraud, false statements or misleading omissions, wrongful taking, embezzlement, bribery, forgery, counterfeiting or extortion, (2) on a felony charge or (3) on an equivalent charge to those in clauses (1) and (2) in jurisdictions which do not use those designations; |
• | the participant’s engagement in any conduct which constitutes an employment disqualification under applicable law (including statutory disqualification as defined under the Exchange Act); |
• | the participant’s violation of any securities or commodities laws, any rules or regulations issued pursuant to such laws, or the rules and regulations of any securities or commodities exchange or association of which AIG or any of its subsidiaries or affiliates is a member; or |
• | the participant’s material violation of AIG’s codes of conduct or any other AIG policy as in effect from time to time. |
• | “Change in Control” of AIG generally means |
• | individuals who, on the effective date of the 2012 ESP, constitute the Board of Directors of AIG (or subsequent directors whose election or nomination was approved by a vote of at least two-thirds of such directors, including by approval of the proxy statement in which such person is named as a nominee for director) cease for any reason to constitute at least a majority of the Board; |
• | any person is or becomes a beneficial owner of 50% or more of AIG’s voting securities (for this purpose, person is as defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act); |
• | consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving AIG that results in any person becoming the beneficial owner of 50% or more of the total voting power of the outstanding voting securities eligible to elect directors of the entity resulting from such transaction; |
• | a sale of all or substantially all of AIG’s assets; or |
• | AIG’s stockholders approve a plan of complete liquidation or dissolution of AIG. |
• | “Good Reason” generally means a reduction of more than 20% in the participant’s annual target direct compensation. In the event of a Change in Control, the definition of Good Reason shall also mean, (1) a greater than 20% decrease in total direct compensation, (2) a material diminution in the participant’s authority, duties or responsibilities, (3) relocation of greater than 50 miles or (4) change in reporting for Executive Vice Presidents and above. |
Name | | | Annual Short- Term Incentive ($)(1) | | | Severance ($)(2) | | | Medical and Life Insurance ($)(3) | | | Pension Plan Credit ($)(4) | | | Unvested Options ($)(5) | | | Unvested Stock Awards ($)(6) | | | Total ($) |
Kevin T. Hogan | | | | | | | | | | | | | | | |||||||
By AIG for “Cause” | | | | | | | | | | | | | | | |||||||
By AIG w/o “Cause” | | | 2,407,500 | | | 5,373,750 | | | 40,000 | | | | | 5,493,359 | | | 13,635,312 | | | 26,949,921 | |
By Executive w/o “Good Reason” | | | | | | | | | | | | | | | |||||||
By Executive with “Good Reason” | | | 2,407,500 | | | 5,373,750 | | | 40,000 | | | | | | | | | 7,821,250 | |||
Qualifying Termination following a Change in Control(7) | | | 2,407,500 | | | 7,165,000 | | | 40,000 | | | | | 5,493,359 | | | 13,635,312 | | | 28,741,171 | |
Death | | | 2,250,000 | | | | | | | | | 5,493,359 | | | 13,635,312 | | | 21,378,671 | |||
Disability(8) | | | 2,407,500 | | | | | | | | | 5,493,359 | | | 13,635,312 | | | 21,536,171 | |||
Retirement | | | 2,407,500 | | | | | | | | | 5,493,359 | | | 13,635,312 | | | 21,536,171 | |||
Elias F. Habayeb | | | | | | | | | | | | | | | |||||||
By AIG for “Cause” | | | | | | | | | | | | | | | |||||||
By AIG w/o “Cause” | | | 1,123,500 | | | 2,583,333 | | | 40,000 | | | | | 1,715,290 | | | 4,948,503 | | | 10,410,626 | |
By Executive w/o “Good Reason” | | | | | | | | | | | | | | | |||||||
By Executive with “Good Reason” | | | 1,123,500 | | | 2,583,333 | | | 40,000 | | | | | | | | | 3,746,833 | |||
Qualifying Termination following a Change in Control(7) | | | 1,123,500 | | | 3,575,000 | | | 40,000 | | | | | 1,715,290 | | | 4,948,503 | | | 11,402,293 | |
Death | | | 1,050,000 | | | | | | | | | 1,715,290 | | | 4,557,287 | | | 7,322,577 | |||
Disability(8) | | | 1,123,500 | | | | | | | | | 1,715,290 | | | 4,948,503 | | | 7,787,293 | |||
Retirement | | | | | | | | | | | | | | | |||||||
Todd P. Solash | | | | | | | | | | | | | | | |||||||
By AIG for “Cause” | | | | | | | | | | | | | | | |||||||
By AIG w/o “Cause” | | | 1,605,000 | | | 3,294,208 | | | 40,000 | | | | | 1,770,794 | | | 5,976,149 | | | 12,686,151 | |
By Executive w/o “Good Reason” | | | | | | | | | | | | | | | |||||||
By Executive with “Good Reason” | | | 1,605,000 | | | 3,294,208 | | | 40,000 | | | | | | | | | 4,939,208 | |||
Qualifying Termination following a Change in Control(7) | | | 1,605,000 | | | 5,050,000 | | | 40,000 | | | | | 1,770,794 | | | 5,976,149 | | | 14,441,943 | |
Death | | | 1,500,000 | | | | | | | | | 1,770,794 | | | 5,605,197 | | | 8,875,991 | |||
Disability(8) | | | 1,605,000 | | | | | | | | | 1,770,794 | | | 5,976,149 | | | 9,351,943 | |||
Retirement | | | | | | | | | | | | | | | |||||||
Robert J. Scheinerman | | | | | | | | | | | | | | | |||||||
By AIG for “Cause” | | | | | | | | | | | | | | | |||||||
By AIG w/o “Cause” | | | 877,400 | | | 1,739,000 | | | 40,000 | | | | | 1,268,403 | | | 4,160,669 | | | 8,085,472 | |
By Executive w/o “Good Reason” | | | | | | | | | | | | | | | |||||||
By Executive with “Good Reason” | | | 877,400 | | | 1,739,000 | | | 40,000 | | | | | | | | | 2,656,400 |
Name | | | Annual Short- Term Incentive ($)(1) | | | Severance ($)(2) | | | Medical and Life Insurance ($)(3) | | | Pension Plan Credit ($)(4) | | | Unvested Options ($)(5) | | | Unvested Stock Awards ($)(6) | | | Total ($) |
Qualifying Termination following a Change in Control(7) | | | 877,400 | | | 2,580,000 | | | 40,000 | | | | | 1,268,403 | | | 4,160,669 | | | 8,926,472 | |
Death | | | 820,000 | | | | | | | | | 1,268,403 | | | 3,857,698 | | | 5,946,101 | |||
Disability(8) | | | 877,400 | | | | | | | | | 1,268,403 | | | 4,160,669 | | | 6,306,472 | |||
Retirement | | | 877,400 | | | | | | | | | 1,268,403 | | | 4,160,669 | | | 6,306,472 | |||
Geoffrey N. Cornell | | | | | | | | | | | | | | | |||||||
By AIG for “Cause” | | | | | | | | | | | | | | | |||||||
By AIG w/o “Cause” | | | 1,177,000 | | | 2,270,667 | | | 40,000 | | | | | 1,240,775 | | | 4,342,881 | | | 9,071,323 | |
By Executive w/o “Good Reason” | | | | | | | | | | | | | | | |||||||
By Executive with “Good Reason” | | | 1,177,000 | | | 2,270,667 | | | 40,000 | | | | | | | | | 3,487,667 | |||
Qualifying Termination following a Change in Control(7) | | | 1,177,000 | | | 3,500,000 | | | 40,000 | | | | | 1,240,775 | | | 4,342,881 | | | 10,300,656 | |
Death | | | 1,100,000 | | | | | | | | | 1,240,775 | | | 4,082,107 | | | 6,422,882 | |||
Disability(8) | | | 1,177,000 | | | | | | | | | 1,240,775 | | | 4,342,881 | | | 6,760,656 | |||
Retirement | | | | | | | | | | | | | | | |||||||
Thomas J. Diemer | | | | | | | | | | | | | | | |||||||
By AIG w/o “Cause” | | | 700,000 | | | 1,696,667 | | | 40,000 | | | 2,029 | | | 1,098,652 | | | 3,635,615 | | | 7,172,963 |
(1) | These amounts represent annual STI payments for which our current named executive officers would have been eligible pursuant to the 2012 ESP had they been terminated on December 31, 2021. Under the 2012 ESP, earned STI awards are prorated based on the number of full months the executive was employed in the termination year. Except in the case of death, these STI payments are based on the named executive officer’s target amount and actual business or function performance and paid at the same time such STI awards are regularly paid to similarly situated active employees. In the case of death, a named executive officer’s STI payment is based on his target amount and paid as soon as administratively possible after the date of death (but in no event later than March 15th of the following year). |
(2) | Severance would have been paid as a lump sum cash payment as soon as practicable and in no event later than 60 days following the termination date. See the description of the 2012 ESP above for more information on severance payments and benefits. Amounts include outstanding tranches of Leadership Continuity Awards that were granted in 2020 and 2021 (Mr. Habayeb - $600,000; Mr. Solash - $1,375,000; Mr. Scheinerman - $375,000; Mr. Cornell - $500,000; and Mr. Diemer - $450,000). |
(3) | The amounts in this column reflect a lump sum payment of 40,000 that can be used to pay for continued healthcare and life insurance coverage following a qualifying termination. The amounts do not include medical and life insurance benefits upon permanent disability or death to the extent that they are generally available to all salaried employees. All of the current named executive officers are eligible participants under the AIG medical and life insurance plans. |
(4) | The amount shown for all of the termination events is the increase, if any, above the accumulated value of pension benefits shown in the 2021 Pension Benefits table, calculated using the same assumptions. Where there is no increase in value, the amount shown in this column is zero. For Mr. Solash, the amount shown in the column is zero because he does not participate in the Plans. For information on pension benefits generally, see “—Post-Employment Compensation—Pension Benefits.” |
(5) | The amounts in this column represent the total market value of unvested stock options as of December 31, 2021 that would accelerate upon termination, based on the difference between the exercise price of the options and the closing sale price of shares of AIG common stock on the NYSE of $56.86 on December 31, 2021. The amounts in this column include the stock options vesting in the case of a named executive’s |
(6) | The amounts in this column represent the total market value (based on the closing sale price on the NYSE of $56.86 on December 31, 2021) of shares of AIG common stock underlying unvested equity-based awards as of December 31, 2021. For the 2019 PSU awards, the amounts in this column include the named executive’s actual earned PSUs for the 2019-2021 performance period (as determined by the CMRC in the first quarter of 2022) that vested in January 2021 in the case of a named executive’s involuntary termination without Cause, involuntary termination without Cause within 24 months following a Change in Control, retirement or disability. Target performance is reflected in the case of death. |
(7) | This row includes amounts that would be paid under the 2012 ESP upon a termination by AIG without Cause or resignation by the executive for Good Reason within 24 months following a Change in Control. Under the outstanding PSU and RSU awards, the amounts in this row include only termination by AIG without Cause or resignation by the executive for Good Reason within 24 months following a Change in Control, with the amount of PSUs vesting shown (i) at the actual amounts earned for the 2019 PSUs (as determined by the CMRC in the first quarter of 2022) that vested in January 2022 and (ii) at target for the 2020 PSUs. However, with respect to the 2020 PSUs, for a Change in Control that occurs following a performance period, the actual PSUs vesting, if any, would be based on actual performance, and for a Change in Control that occurs during a performance period, the CMRC may determine to use actual performance through the date of the Change in Control rather than target performance to determine the actual PSUs vesting, if any. |
(8) | Amounts shown in this row represent the amounts the executive would be entitled to receive upon experiencing a disability. |
• | Return on Adjusted Segment Common Equity; |
• | General Operating Expense; and |
• | Investment Performance. |
• | a material restatement of all or a portion of the Company’s financial statements; |
• | incentive compensation was awarded to, or received by, the executive based on materially inaccurate financial statements or on performance metrics that are materially inaccurately determined (regardless of whether the executive was responsible for the inaccuracy); |
• | a failure by an executive to properly identify, assess or sufficiently raise concerns about risk, including in a supervisory role, that results in a material adverse impact on the Company or any of its affiliates or the broader financial system; |
• | an action or omission by an executive that constitutes a material violation of the risk policies of the Company or any of its affiliates; and |
• | an action or omission by the executive results in material financial or reputational harm to the Company or any of its affiliates. |
• | each person known to own beneficially more than five percent of our common stock, including the selling stockholder; |
• | each of our directors; |
• | each of our named executive officers; and |
• | all of our current directors and executive officers as a group. |
| | Shares Beneficially Owned Before the Offering | | | Shares Offered Hereby | | | Shares Beneficially Owned After the Offering Assuming the Underwriters’ Option Is Not Exercised | | | Shares Beneficially Owned After the Offering Assuming the Underwriters’ Option Is Exercised in Full | ||||||||||
Name and Address of Beneficial Owner | | | Shares | | | % | | | Shares | | | % | | | Shares | | | % | |||
5% Stockholders | | | | | | | | | | | | | | | |||||||
AIG(1) | | | | | | | | | | | | | | | |||||||
Argon Holdco LLC(2) | | | | | | | | | | | | | | | |||||||
Directors and Named Executive Officers | | | | | | | | | | | | | | | |||||||
Peter Zaffino | | | | | | | | | | | | | | | |||||||
Adam Burk | | | | | | | | | | | | | | | |||||||
Lucy Fato | | | | | | | | | | | | | | | |||||||
Shane Fitzsimons | | | | | | | | | | | | | | | |||||||
Jonathan Gray | | | | | | | | | | | | | | | |||||||
Christopher Lynch | | | | | | | | | | | | | | | |||||||
Mark Lyons | | | | | | | | | | | | | | | |||||||
Elaine Rocha | | | | | | | | | | | | | | | |||||||
Amy Schioldager | | | | | | | | | | | | | | | |||||||
Kevin Hogan | | | | | | | | | | | | | | | |||||||
Elias Habayeb | | | | | | | | | | | | | | | |||||||
Todd Solash | | | | | | | | | | | | | | | |||||||
Robert Scheinerman | | | | | | | | | | | | | | | |||||||
All current directors and executive officers as a group (persons) | | | | | | | | | | | | | | | |||||||
Geoffrey Cornell | | | | | | | | | | | | | | | |||||||
Thomas Diemer | | | | | | | | | | | | | | |
| | Shares Beneficially Owned Before the Offering and After the Offering | |||||||
Name and Address of Beneficial Owner | | | Number of Shares Owned | | | Percent of Class Before the Offering (%) | | | Percent of Class After the Offering (%) |
Directors and Named Executive Officers | | | | | | | |||
Peter Zaffino | | | | | | | |||
Adam Burk | | | | | | | |||
Lucy Fato | | | | | | | |||
Shane Fitzsimons | | | | | | | |||
Jonathan Gray | | | | | | | |||
Christopher Lynch | | | | | | | |||
Mark Lyons | | | | | | | |||
Elaine Rocha | | | | | | | |||
Amy Schioldager | | | | | | | |||
Kevin Hogan | | | | | | | |||
Elias Habayeb | | | | | | | |||
Todd Solash | | | | | | | |||
Robert Scheinerman | | | | | | | |||
All current directors and executive officers as a group (persons) | | | | | | | |||
Geoffrey Cornell | | | | | | | |||
Thomas Diemer | | | | | | |
(2) |
• | until AIG ceases to beneficially own more than 50% of our outstanding common stock, AIG will be entitled to designate a majority of the directors on the Board; |
• | thereafter, and until AIG ceases to beneficially own at least 5% of our outstanding common stock, AIG will be entitled to designate a number of the total number of directors entitled to serve on the Board proportionate to the percentage of our outstanding common stock beneficially owned by AIG, rounded up to the nearest whole number; and |
• | thereafter, AIG will no longer have any right to designate directors to serve on the Board under the Separation Agreement. |
• | at the option of AIG, the Board will appoint a director designated by AIG to the audit committee of the Board, who, until the date immediately preceding the first anniversary of the date upon which the registration statement of which this prospectus forms a part is declared effective, need not be an independent director; |
• | at any time during which the Board includes a director designated by AIG who is also an independent director, at least one member of the audit committee of the Board will be a director designated by AIG, so long as the director meets certain standards for membership on the committee; |
• | until AIG ceases to beneficially own at least 25% of our outstanding common stock, if the Board has a compensation committee, AIG will be entitled to designate a number of the total number of directors entitled to serve on the compensation committee proportionate to the percentage of our outstanding common stock beneficially owned by AIG, rounded up to the nearest whole number, provided that following the date on which AIG ceases to beneficially own more than 50% of our outstanding common stock, such directors must be independent directors; |
• | until AIG ceases to beneficially own at least 25% of our outstanding common stock, if the Board has a nominating and governance committee, AIG will be entitled to designate a number of the total number of directors entitled to serve on the nominating and governance committee proportionate to the percentage of our outstanding common stock beneficially owned by AIG, rounded up to the nearest whole number, provided that following the date on which AIG ceases to beneficially own more than 50% of our outstanding common stock, such directors must be independent directors; and |
• | until AIG ceases to beneficially own more than 50% of our outstanding common stock, subject to certain exceptions, the compensation committee and the nominating and governance committee will only act with the consent of a majority of the members of the committee, which majority must include a director designated by AIG. |
• | any merger, consolidation or similar transaction (or any amendment to or termination of an agreement to enter into such a transaction) involving us or any of our subsidiaries, on the one hand, and any other person, on the other hand; other than (i) an acquisition of 100% of the capital stock of such other person or (ii) a disposition of 100% of the capital stock of a subsidiary of us, in each case involving consideration not exceeding a specified threshold; |
• | any acquisition or disposition of securities, assets or liabilities (including through reinsurance on a proportional or non-proportional basis whether involving full or partial risk transfer or for other purposes of surplus or capital relief) involving consideration or book value exceeding a specified threshold, other than transactions involving assets invested in our consolidated general account and approved in accordance with our established policies and procedures to monitor invested assets; |
• | any increase or decrease in our authorized capital stock, or the creation of any new class or series of our capital stock; |
• | any issuance or acquisition (including stock buy-backs, redemptions, and other reductions of capital) of capital stock, or securities convertible into or exchangeable or exercisable for capital stock or equity-linked securities, subject to certain exceptions; |
• | any issuance or acquisition (including redemptions, prepayments, open-market or negotiated repurchases or other transactions reducing the outstanding debt) of any debt security of, to or from a third party, in each case involving an aggregate principal amount exceeding a specified threshold; |
• | any other incurrence or guarantee of a debt obligation to or of a third party having a principal amount exceeding a specified threshold, subject to certain exceptions; |
• | entry into or termination of any joint venture, cooperation or similar arrangements involving assets having a book value exceeding a specified threshold; |
• | the listing or delisting of securities on a securities exchange, other than the listing or delisting of debt securities on the NYSE or any other securities exchange located solely in the United States; |
• | (A) the formation of, or delegation of authority to, any new committee, or subcommittee thereof, of our Board, (B) the delegation of authority to any existing committee or subcommittee of our Board not set forth in the committee’s charter or authorized by our Board prior to the completion of this offering or (C) any amendments to the charter (or equivalent authorizing document) of any committee, including any action to increase or decrease size of any committee (whether by amendment or otherwise), except in each case as required by applicable law; |
• | the amendment (or approval or recommendation of the amendment) of our certificate of incorporation or by-laws; |
• | any filing or the making of any petition under bankruptcy laws, any general assignment for the benefit of creditors, any admission of an inability to meet obligations generally as they become due or any other act the consequence of which is to subject us or any subsidiary to a proceeding under bankruptcy laws; |
• | any commencement or settlement of material litigation or any regulatory proceedings if such litigation or regulatory proceeding could be material to AIG or could have an adverse effect on AIG’s reputation or relationship with any governmental authority; |
• | entry into any material written agreement or settlement with, or any material written commitment to, a regulatory agency or other governmental authority, or any settlement of a material enforcement action if such agreement, settlement or commitment could be material to AIG or could have an adverse effect on AIG’s reputation or relationship with any governmental authority; |
• | any dissolution or winding-up of Corebridge; |
• | the election, appointment, hiring, dismissal or removal (other than for cause) of our chief executive officer or chief financial officer; |
• | the entry into, termination of or material amendment of any material contract with a third party, subject to certain exceptions; |
• | any action that could result in AIG being required to make regulatory filings with or seek approval or consent from a governmental authority, other than any as contemplated by the Registration Rights Agreement; |
• | any material change to the nature or scope of our business immediately prior to the completion of this offering; or |
• | any material change in hedging strategy. |
• | we are required to continue to provide AIG with information and data relating to our business and financial results and access to our personnel, data and systems, and to maintain disclosure controls and procedures and internal control over financial reporting, as further provided therein during certain periods, including as long as AIG is required to consolidate our financial results with its financial results and, thereafter, until the later of (i) the date when AIG is no longer required to account in its financial statements for its holdings in us under an equity accounting method or to consolidate our financial results with its financial results and (ii) the date on which AIG ceases to beneficially own at least 20% of our outstanding common stock; |
• | until the date on which AIG is no longer required to account in its financial statements for its holdings in us under an equity accounting method, AIG will have certain access and cooperation rights with respect to the independent public registered accounting firm responsible for the audit of our financial statements and to our internal audit function; |
• | until the date on which AIG ceases to beneficially own at least 20% of our outstanding common stock, we will consult and coordinate with AIG with respect to public disclosures and filings, including in connection with our quarterly and annual financial results; and |
• | during any period in which AIG is or may be deemed to control us for applicable regulatory purposes, and in any case at all times prior to the date on which AIG ceases to beneficially own at least 10% of our outstanding common stock, we will provide AIG with information, records and documents requested or demanded by regulatory authorities or relating to regulatory filings, reports, responses or communications, and provide access to our offices, employees and management to regulatory authorities having jurisdiction or oversight authority over AIG. |
• | assets used primarily in or are primarily related to the operation or conduct of our business, operations and activities of AIG conducted immediately prior to the Separation Time (which, under the Separation Agreement, means 12:01 a.m. Eastern Time on the date of consummation of this offering or such other date as AIG and Corebridge may mutually agree) by either us or AIG, as described in this prospectus (the “Corebridge Business”), including equity interests of specified entities, assets reflected on the pro forma condensed balance sheet of the Corebridge Business, including any notes thereto, as of , 2022, as presented in this prospectus) (the “Corebridge Balance Sheet”) (subject to dispositions of such assets subsequent to the date thereof), assets of the nature or type that would have resulted in them being included as assets on a pro forma combined balance sheet of our Company prepared in accordance with such balance sheet, assets expressly provided by the Separation Agreement or certain other agreements to be transferred to or owned by us, certain contracts, accounts receivable, books and records, intellectual property, technology, information technology, permits and real and personal property, will be transferred to or retained by us; |
• | liabilities included or reflected as liabilities on the Corebridge Balance Sheet (subject to discharge of such liabilities subsequent to the date thereof), liabilities of a nature or type that would have resulted in them being included as liabilities on a pro forma combined balance sheet of the Company prepared in accordance with such balance sheet, certain accounts payable, liabilities expressly provided by the Separation Agreement or certain other agreements as liabilities to be assumed by the Company, liabilities relating to or arising out of or resulting from actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to, at or after the Separation Time to the extent relating to, arising out of or resulting from the Corebridge Business or an asset allocated to us as described in the preceding bullet point, liabilities relating to or arising out of contracts, intellectual property, technology, information technology, permits, real or personal property allocated to us as provided in the preceding bullet point or products and services supplied, sold, provided or distributed, as the case may be, at any time, by us under a Company trademark, and liabilities arising out of claims made by any third party against any AIG, or us to the extent relating to, arising out of or resulting from the Corebridge Business or the assets allocated to the Company as described in the preceding bullet point, will be assumed or retained by the Company; and |
• | all assets and liabilities, other than the assets and liabilities allocated to the company or one of our subsidiaries as provided in the preceding two bullet points, will be transferred to, assumed by or retained by AIG or on of its subsidiaries. |
• | information technology services, |
• | certain finance and tax capabilities, |
• | risk management and internal audit functions, |
• | legal functions, |
• | operational services, |
• | services related to real estate, |
• | human resources, |
• | marketing services, and |
• | various other miscellaneous services. |
• | amend the organizational documents of Corebridge or any of our material subsidiaries, in either case so as to include provisions that would disproportionately adversely affect Blackstone in any material respect relative to AIG, in each case in their capacities as holders of our common stock, after taking into account differences in their respective ownership levels; |
• | effect a voluntary liquidation, dissolution or winding up of Corebridge; |
• | repurchase shares of common stock, if such repurchase would result in Blackstone owning more than 9.9% of our then-outstanding common stock; |
• | other than (x) with respect to documentation relating to our separation from AIG, (y) any modification, amendment, termination of, or entry into any material contract between us and AIG (an “Affiliate Contract”) that is on arm’s-length terms, fair and reasonable to us in all material respects or in the ordinary course of business consistent with historical practice or (z) any modification, amendment or termination of, or entry into, any Affiliate Contracts in connection with our separation from AIG, (A) modify, amend (in any material respect) or terminate (other than as a result of the expiration of the term thereof) any Affiliate Contract, or waive, release or assign any material rights or claims thereunder or (B) enter into any Affiliate Contract, in each of cases (A) and (B) on terms that are adverse in any material respect to Blackstone; provided that the consent of Blackstone shall not be unreasonably withheld, delayed or conditioned; and |
• | following the completion of this offering, effect a voluntary deregistration or delisting of our common stock. |
• | if the purchaser of such shares is an affiliate of Blackstone and agrees to become bound by the Blackstone Stockholders’ Agreement; |
• | after the first, second and third anniversary of the closing of this offering, Blackstone may sell up to 25%, 67% and 75%, respectively, of its initial investment in 9.9% of our outstanding common stock; |
• | after the fifth anniversary of the closing of this offering, Blackstone may sell any shares of our common stock; |
• | in connection with any share repurchase by us or AIG, to cause Blackstone’s ownership not to exceed 9.9% of our then-outstanding common stock; |
• | in connection with a change of control of our company that is approved and recommended to our stockholders by our Board; and |
• | with our consent (or, for so long as AIG owns at least 50% of our common stock, with AIG’s consent). |
• | AHAC and NUFIC provide guarantees with respect to all obligations arising from certain insurance policies issued by the Company. The Company paid no fees with respect to these guarantees for the years ended December 31, 2021, 2020 and 2019. For further information with respect to these guarantees, see Note 21 to our audited consolidated financial statements. |
• | AIG provides a full and unconditional guarantee of all outstanding debt of AIGLH. This includes: |
• | A guarantee made by AIG in connection with an aggregate amount of $350 million promissory notes issued by AIGLH to an Corebridge subsidiary pursuant to a sale-leaseback transaction in |
• | A guarantee made by AIG in connection with junior subordinated debentures of AIGLH, a subsidiary of the Company, which as of December 31, 2021 consisted of $54 million of 8.500% junior subordinated debentures due July 2030, $142 million of 8.125% junior subordinated debentures due March 2046 and $31 million of 7.570% junior subordinated debentures due December 2046. |
• | $282 million aggregate principal amount consisting of certain notes due and bonds payable. For further information, see “Recapitalization—Indebtedness Remaining Outstanding Following this Offering.” |
• | Under an Amended and Restated Tax Payment Allocation Agreement, dated June 6, 2011, between AIG and AIG Bermuda, AIG has agreed to indemnify AIG Bermuda for certain tax liabilities resulting from adjustments made by the IRS or other appropriate authorities. During June 2021, AIG made a payment of $354 million to the U.S. Treasury related to this indemnification. For additional information, see Note 19 and Note 20 to our audited consolidated financial statements. |
• | Under the terms of six transactions entered into between 2012 and 2014 that securitized portfolios of certain debt securities owned by Corebridge, Corebridge was obligated to make certain capital contributions to such a securitization VIE in the event that the VIE was unable to redeem any rated notes it had issued on the relevant redemption date. AIG Inc. had provided a guarantee to the six securitization VIEs of the obligations of Corebridge to make such capital contributions when due. During the year ended December 31, 2021, Corebridge terminated these six VIEs and recorded a loss on extinguishment of debt of $145 million. |
• | On January 1, 2015, the Company entered into a revolving loan facility with AIG Inc. pursuant to which the borrowers can, on a several basis, borrow monies from AIG Inc. (as lender), subject to certain terms and conditions. The total aggregate amount of loans borrowed by all borrowers under the facility cannot exceed $500 million with an interest rate of LIBOR plus 15 basis points. The loan facility also sets forth individual maximum borrowing limits for each borrower. As of December 31, 2021, 2020 and 2019, there were no amounts owed under this agreement. |
• | On April 1, 2015, AIGLH entered into a revolving loan facility with AIG Inc. pursuant to which AIGLH can borrow monies from AIG Inc. (as lender), subject to certain terms and conditions. The total aggregate amount of loans borrowed under the facility cannot exceed $500 million with an interest rate of LIBOR plus 15 basis points. As of December 31, 2021, 2020 and 2019, there were no amounts owed under this agreement. |
• | On August 14, 2018, AIG Life UK entered into a revolving loan facility with AIG Inc. pursuant to which AIG Life UK can borrow monies from AIG Inc. (as lender), subject to certain terms and conditions. Any principal amounts borrowed under this facility bear an interest rate of LIBOR plus 15 basis points and may be repaid and re-borrowed, in whole or in part, from time to time, without penalty. However, the total aggregate amount of loans borrowed under the facility cannot exceed $25 million. As of December 31, 2021, 2020 and 2019, there were no amounts owed under this agreement. |
| | Year Ended December 31, | |||||||
($ in million) | | | 2021 | | | 2020 | | | 2019 |
Types of Related Party Transactions | | | | | | | |||
Promissory Notes | | | $(17) | | | $(4) | | | $(8) |
Other Intercompany Funding Arrangements | | | (3) | | | (7) | | | (26) |
Derivative Agreements | | | (17) | | | (19) | | | — |
Tax Sharing Agreements | | | (1,532) | | | (1,707) | | | (1,176) |
General Operating Services | | | (229) | | | (204) | | | (226) |
Advisory Services | | | 88 | | | 88 | | | 85 |
Compensation and Other Arrangements Concerning Employees | | | (237) | | | (254) | | | (249) |
Total | | | $(1,947) | | | $(2,107) | | | $(1,600) |
• | prior to such time, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder; |
• | upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not the outstanding voting stock owned by the interested stockholder, those shares owned (i) by persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or |
• | at or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 662∕3% of the outstanding voting stock that is not owned by the interested stockholder. |
• | any breach of the director’s duty of loyalty; |
• | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; |
• | unlawful payments of dividends or unlawful stock repurchases, redemptions or other distributions; or |
• | any transaction from which the director derives an improper personal benefit. |
• | if the purchaser of such shares is an affiliate of Blackstone and agrees to become bound by the Blackstone Stockholders’ Agreement; |
• | after the first, second and third anniversary of the closing of this offering, Blackstone may sell up to 25%, 67% and 75%, respectively, of its initial investment in 9.9% of our outstanding common stock; |
• | after the fifth anniversary of the closing of this offering, Blackstone may sell any shares of our common stock; |
• | in connection with any share repurchase by us or AIG, to cause Blackstone’s ownership not to exceed 9.9% of our then-outstanding common stock; |
• | in connection with a change of control of our company that is approved and recommended to our stockholders by our Board; and |
• | with our consent (or, for so long as AIG owns at least 50% of our common stock, with AIG’s consent). |
• | 1% of the number of shares of our common stock then outstanding, which will equal approximately shares immediately after this offering; and |
• | the average reported weekly trading volume of our common stock on the NYSE during the four calendar weeks preceding the date of filing a Notice of Proposed Sale of Securities Pursuant to Rule 144 with respect to the sale. |
• | an individual who is neither a citizen nor a resident of the United States; |
• | a corporation that is not created or organized in or under the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate that is not subject to U.S. federal income tax on income from non-U.S. sources which is not effectively connected with the conduct of a trade or business in the United States; or |
• | a trust unless (i) a court within the United States is able to exercise primary supervision over its administration and one or more U.S. persons have the authority to control all of its substantial decisions or (ii) it has in effect a valid election under applicable U.S. Treasury regulations to be treated as a U.S. person. |
(i) | such gain is effectively connected with the conduct of a trade or business in the United States by such Non-U.S. Holder, in which event such Non-U.S. Holder generally will be subject to U.S. federal income tax on such gain in substantially the same manner as a U.S. person (except as provided by an applicable tax treaty) and, if it is treated as a corporation for U.S. federal income tax purposes, may also be subject to a branch profits tax at a rate of 30% (or a lower rate if provided by an applicable tax treaty); |
(ii) | such Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of such sale, exchange or other disposition and certain other conditions are met, in which event such gain (net of certain U.S. source losses) generally will be subject to U.S. federal income tax at a rate of 30% (except as provided by an applicable tax treaty); or |
(iii) | we are or have been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of (x) the five-year period ending on the date of such sale, exchange or other disposition and (y) such Non-U.S. Holder’s holding period with respect to such common stock, and certain other conditions are met. |
Underwriter | | | Number of Shares |
J.P. Morgan Securities LLC | | | |
Morgan Stanley & Co. LLC | | | |
Piper Sandler & Co. | | | |
| | ||
Total | | |
| | Per Share | | | Without Option | | | With Option | |
Public offering price | | | $ | | | $ | | | $ |
Underwriting discount | | | $ | | | $ | | | $ |
Proceeds, before expenses, to the selling stockholder | | | $ | | | $ | | | $ |
• | does not constitute a disclosure document or a prospectus under Chapter 6D.2 of the Corporations Act 2001 (Cth) (the “Corporations Act”); |
• | has not been, and will not be, lodged with the Australian Securities and Investments Commission (“ASIC”), as a disclosure document for the purposes of the Corporations Act and does not purport to include the information required of a disclosure document for the purposes of the Corporations Act; and |
• | may only be provided in Australia to select investors who are able to demonstrate that they fall within one or more of the categories of investors, available under section 708 of the Corporations Act (“Exempt Investors”). |
(i) | to any legal entity which is a qualified investor as defined under Article 2 of the Prospectus Regulation; |
(ii) | to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the Prospectus Regulation), subject to obtaining the prior consent of the underwriters; or |
(iii) | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
(a) | to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 274 of the SFA; |
(b) | to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA; or |
(c) | otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA. |
(a) | a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or |
(b) | a trust (where the trustee is not an accredited investor) (as defined in Section 4A of the SFA) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, |
(i) | to an institutional investor or to a relevant person defined in Section 275(2) of the SFA, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; |
(ii) | where no consideration is or will be given for the transfer; |
(iii) | where the transfer is by operation of law; |
(iv) | as specified in Section 276(7) of the SFA; or |
(v) | as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 of Singapore. |
(i) | to any legal entity which is a qualified investor as defined under Article 2 of the UK Prospectus Regulation; |
(ii) | to fewer than 150 natural or legal persons (other than qualified investors as defined under Article 2 of the UK Prospectus Regulation), subject to obtaining the prior consent of underwriters for any such offer; or |
(iii) | in any other circumstances falling within Section 86 of the Financial Services and Markets Act 2000 (as amended, the “FSMA”), |
• | “AATOI” — adjusted after-tax operating income attributable to our common stockholders; |
• | “ABS” — asset-backed securities; |
• | “APTOI” — adjusted pre-tax operating income; |
• | “AUA” — assets under administration; |
• | “AUM” — assets under management; |
• | “AUMA” — assets under management and administration; |
• | “CDO” — collateralized debt obligations; |
• | “CDS” — credit default swap; |
• | “CMBS” — commercial mortgage-backed securities; |
• | “DAC” — deferred policy acquisition costs; |
• | “DSI” — deferred sales inducement; |
• | “FASB” — the Financial Accounting Standards Board; |
• | “GAAP” — accounting principles generally accepted in the United States of America; |
• | “GIC” — guaranteed investment contract; |
• | “GMDB” — guaranteed minimum death benefits; |
• | “GMWB” — guaranteed minimum withdrawal benefits; |
• | “ISDA” — the International Swaps and Derivatives Association, Inc.; |
• | “MBS” — mortgage-backed securities; |
• | “NAIC” — National Association of Insurance Commissioners; |
• | “PRT” — pension risk transfer; |
• | “RMBS” — residential mortgage-backed securities; |
• | “S&P” — Standard & Poor’s Financial Services LLC; |
• | “SEC” — the U.S. Securities and Exchange Commission; |
• | “URR” — unearned revenue reserve; |
• | “VIX” — volatility index; |
• | “VIE” — variable interest entity; and |
• | “VOBA” — value of business acquired. |
Audited Consolidated Financial Statements | | | |
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Audited Consolidated Financial Statement Schedules | | | |
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| | ||
| |
(in millions, except for share data) | | | December 31, 2021 | | | December 31, 2020 |
Assets: | | | | | ||
Investments: | | | | | ||
Fixed maturity securities: | | | | | ||
Bonds available for sale, at fair value, net of allowance for credit losses of $78 in 2021 and $131 in 2020 (amortized cost: 2021 - $182,593; 2020 - $174,562)* | | | $198,568 | | | $197,941 |
Other bond securities, at fair value (See Note 5)* | | | 2,082 | | | 780 |
Equity securities, at fair value (See Note 5)* | | | 242 | | | 609 |
Mortgage and other loans receivable, net of allowance for credit losses of $496 in 2021 and $657 in 2020* | | | 39,388 | | | 38,314 |
Other invested assets (portion measured at fair value: 2021 - $7,104; 2020 - $5,171)* | | | 10,567 | | | 13,395 |
Short-term investments, including restricted cash of $57 in 2021 and $58 in 2020 (portion measured at fair value: 2021 - $1,455; 2020 - $3,851)* | | | 5,471 | | | 9,235 |
Total investments | | | 256,318 | | | 260,274 |
Cash* | | | 537 | | | 654 |
Accrued investment income* | | | 1,760 | | | 1,781 |
Premiums and other receivables, net of allowance for credit losses and disputes of $1 in 2021 and $2 in 2020 | | | 884 | | | 860 |
Reinsurance assets - Fortitude Re, net of allowance for credit losses and disputes of $0 in 2021 and $0 in 2020 | | | 28,472 | | | 29,158 |
Reinsurance assets - other, net of allowance for credit losses and disputes of $101 in 2021 and $83 in 2020 | | | 2,932 | | | 2,707 |
Deferred income taxes | | | 4,837 | | | 3,640 |
Deferred policy acquisition costs and value of business acquired | | | 8,058 | | | 7,363 |
Other assets, including restricted cash of $7 in 2021 and $206 in 2020 (portion measured at fair value: 2021 - $684; 2020 - $755)* | | | 3,303 | | | 3,428 |
Separate account assets, at fair value | | | 109,111 | | | 100,290 |
Total assets | | | $416,212 | | | $410,155 |
Liabilities: | | | | | ||
Future policy benefits for life and accident and health insurance contracts | | | $57,751 | | | 54,660 |
Policyholder contract deposits (portion measured at fair value: 2021 - $9,824; 2020 - $10,121) | | | 156,846 | | | 154,892 |
Other policyholder funds | | | 2,849 | | | 2,492 |
Fortitude Re funds withheld payable (portion measured at fair value: 2021 - $7,974; 2020 - $7,749) | | | 35,144 | | | 36,789 |
Other liabilities (portion measured at fair value: 2021 - $191; 2020 - $245)* | | | 9,903 | | | 9,954 |
Short-term debt | | | 8,317 | | | — |
Long-term debt | | | 427 | | | 905 |
Debt of consolidated investment entities (portion measured at fair value: 2021 - $5; 2020 - $950)* | | | 6,936 | | | 10,341 |
Separate account liabilities | | | 109,111 | | | 100,290 |
Total liabilities | | | $387,284 | | | $370,323 |
Contingencies, commitments and guarantees (See Note 15) | | | | | ||
Redeemable noncontrolling interest | | | $83 | | | 51 |
Corebridge Shareholders' equity: | | | | | ||
Common stock class A, $1.00 par value; 180,000 shares authorized; 90,100 shares issued | | | — | | | — |
Common stock class B, $1.00 par value; 20,000 shares authorized; 9,900 shares issued | | | — | | | — |
Additional paid-in capital | | | 8,060 | | | — |
Retained earnings | | | 8,859 | | | — |
Shareholder's Net Investment | | | — | | | 22,579 |
Accumulated other comprehensive income | | | 10,167 | | | 14,653 |
Total Corebridge Shareholders' equity | | | 27,086 | | | 37,232 |
Non-redeemable noncontrolling interests | | | 1,759 | | | 2,549 |
Total equity | | | $28,845 | | | $39,781 |
Total liabilities, redeemable noncontrolling interest and equity | | | $416,212 | | | $410,155 |
* | See Note 9 for details of balances associated with variable interest entities. |
| | Years Ended December 31, | |||||||
(dollars in millions, except per common share data) | | | 2021 | | | 2020 | | | 2019 |
Revenues: | | | | | | | |||
Premiums | | | $5,637 | | | $4,341 | | | $3,501 |
Policy fees | | | 3,051 | | | 2,874 | | | 2,930 |
Net investment income: | | | | | | | |||
Net investment income - excluding Fortitude Re funds withheld assets | | | 9,897 | | | 9,089 | | | 9,176 |
Net investment income - Fortitude Re funds withheld assets | | | 1,775 | | | 1,427 | | | 1,598 |
Total net investment income | | | 11,672 | | | 10,516 | | | 10,774 |
Net realized gains (losses): | | | | | | | |||
Net realized gains (losses) - excluding Fortitude Re funds withheld assets and embedded derivative | | | 1,618 | | | (765) | | | (159) |
Net realized gains on Fortitude Re funds withheld assets | | | 924 | | | 1,002 | | | 262 |
Net realized losses on Fortitude Re funds withheld embedded derivative | | | (687) | | | (3,978) | | | (5,167) |
Total net realized gains (losses) | | | 1,855 | | | (3,741) | | | (5,064) |
Advisory fee income | | | 597 | | | 553 | | | 572 |
Other income | | | 578 | | | 519 | | | 497 |
Total revenues | | | $23,390 | | | $15,062 | | | $13,210 |
Benefits and expenses: | | | | | | | |||
Policyholder benefits | | | 8,050 | | | 6,602 | | | 5,335 |
Interest credited to policyholder account balances | | | 3,549 | | | 3,528 | | | 3,614 |
Amortization of deferred policy acquisition costs and value of business acquired | | | 1,057 | | | 543 | | | 674 |
Non-deferrable insurance commissions | | | 680 | | | 604 | | | 564 |
Advisory fee expenses | | | 322 | | | 316 | | | 322 |
General operating expenses | | | 2,104 | | | 2,027 | | | 1,975 |
Interest expense | | | 389 | | | 490 | | | 555 |
Loss on extinguishment of debt | | | 219 | | | 10 | | | 32 |
Net (gain) loss on divestitures | | | (3,081) | | | — | | | — |
Net (gain) loss on Fortitude Re transactions | | | (26) | | | 91 | | | — |
Total benefits and expenses | | | $13,263 | | | $14,211 | | | $13,071 |
Income before income tax expense (benefit) | | | 10,127 | | | 851 | | | 139 |
Income tax expense (benefit): | | | | | | | |||
Current | | | 1,946 | | | 1,724 | | | 1,315 |
Deferred | | | (103) | | | (1,739) | | | (1,483) |
Income tax expense (benefit) | | | $1,843 | | | $(15) | | | $(168) |
Net income | | | 8,284 | | | 866 | | | 307 |
Less: | | | | | | | |||
Net income attributable to noncontrolling interests | | | 929 | | | 224 | | | 257 |
Net income attributable to Corebridge | | | $7,355 | | | $642 | | | $50 |
| | | | | | ||||
Income (loss) per common share attributable to Corebridge common shareholders: | | | | | | | |||
Class A - Basic and diluted | | | $76,127 | | | $6,420 | | | $500 |
Class B - Basic and diluted | | | $50,101 | | | $6,420 | | | $500 |
Weighted average shares outstanding: | | | | | | | |||
Class A - Basic and diluted | | | 90,100 | | | 90,100 | | | 90,100 |
Class B - Basic and diluted | | | 9,900 | | | 9,900 | | | 9,900 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Net income | | | $8,284 | | | $866 | | | $307 |
Other comprehensive income (loss), net of tax | | | | | | | |||
Change in unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken | | | 22 | | | (62) | | | — |
Change in unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken | | | — | | | — | | | 673 |
Change in unrealized appreciation (depreciation) of all other investments | | | (4,509) | | | 5,337 | | | 6,227 |
Change in foreign currency translation adjustments | | | (20) | | | 57 | | | 18 |
Change in retirement plan liabilities | | | 1 | | | (2) | | | (2) |
Other comprehensive income (loss) | | | (4,506) | | | 5,330 | | | 6,916 |
Comprehensive income (loss) | | | 3,778 | | | 6,196 | | | 7,223 |
Less: | | | | | | | |||
Comprehensive income attributable to noncontrolling interests | | | 929 | | | 230 | | | 265 |
Comprehensive income (loss) attributable to Corebridge | | | $2,849 | | | $5,966 | | | $6,958 |
(in millions) | | | Common Stock Class A | | | Common Stock Class B | | | Additional Paid-In Capital | | | Retained Earnings | | | Shareholders’ Net Investment | | | Accumulated Other Comprehensive Income | | | Total Corebridge Shareholders’ Equity | | | Non- Redeemable Non- Controlling Interests | | | Total Shareholders’ Equity |
Balance, January 1, 2019 | | | $— | | | $— | | | $— | | | $— | | | $23,970 | | | $2,421 | | | $26,391 | | | $2,073 | | | $28,464 |
Cumulative effect of change in accounting principle, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Change in net investment | | | — | | | — | | | — | | | — | | | (1,555) | | | — | | | (1,555) | | | — | | | (1,555) |
Net income | | | — | | | — | | | — | | | — | | | 50 | | | — | | | 50 | | | 257 | | | 307 |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | 6,908 | | | 6,908 | | | 8 | | | 6,916 |
Changes in noncontrolling interests due to divestitures and acquisitions | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 120 | | | 120 |
Contributions from noncontrolling interests | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 255 | | | 255 |
Distributions to noncontrolling interests | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (838) | | | (838) |
Other | | | — | | | — | | | — | | | — | | | 11 | | | — | | | 11 | | | (1) | | | 10 |
Balance, December 31, 2019 | | | $— | | | $— | | | $— | | | $— | | | $22,476 | | | $9,329 | | | $31,805 | | | $1,874 | | | $33,679 |
Cumulative effect of change in accounting principle, net of tax | | | — | | | — | | | — | | | — | | | (246) | | | — | | | (246) | | | — | | | (246) |
Change in net investment | | | — | | | — | | | — | | | — | | | (296) | | | — | | | (296) | | | — | | | (296) |
Net income | | | — | | | — | | | — | | | — | | | 642 | | | — | | | 642 | | | 224 | | | 866 |
Other comprehensive income, net of tax | | | — | | | — | | | — | | | — | | | — | | | 5,324 | | | 5,324 | | | 6 | | | 5,330 |
Changes in noncontrolling interests due to divestitures and acquisitions | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 633 | | | 633 |
Contributions from noncontrolling interests | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 268 | | | 268 |
Distributions to noncontrolling interests | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (454) | | | (454) |
Other | | | — | | | — | | | — | | | — | | | 3 | | | — | | | 3 | | | (2) | | | 1 |
Balance, December 31, 2020 | | | $— | | | $— | | | $— | | | $— | | | $22,579 | | | $14,653 | | | $37,232 | | | $2,549 | | | $39,781 |
Cumulative effect of change in accounting principle, net of tax | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Change in net investment | | | — | | | — | | | — | | | — | | | (13,004) | | | — | | | (13,004) | | | — | | | (13,004) |
Net income | | | — | | | — | | | — | | | — | | | 7,355 | | | — | | | 7,355 | | | 929 | | | 8,284 |
Other comprehensive loss, net of tax | | | — | | | — | | | — | | | — | | | — | | | (4,506) | | | (4,506) | | | — | | | (4,506) |
Changes in noncontrolling interests due to divestitures and acquisitions | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (373) | | | (373) |
Contributions from noncontrolling interests | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 264 | | | 264 |
Distributions to noncontrolling interests | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,611) | | | (1,611) |
Other | | | — | | | — | | | — | | | — | | | (11) | | | 20 | | | 9 | | | 1 | | | 10 |
Reorganization transactions | | | — | | | — | | | 8,060 | | | 8,859 | | | (16,919) | | | — | | | — | | | — | | | — |
Balance, December 31, 2021 | | | $— | | | $— | | | $8,060 | | | $8,859 | | | $— | | | $10,167 | | | $27,086 | | | $1,759 | | | $28,845 |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Cash flows from operating activities: | | | | | | | |||
Net income | | | $8,284 | | | $866 | | | $307 |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |||
Noncash revenues, expenses, gains and losses included in income: | | | | | | | |||
Net (gain) loss on Fortitude Re transactions | | | (26) | | | 20 | | | — |
General operating and other expenses | | | 122 | | | 82 | | | 75 |
Net (gains) on sales of securities available for sale and other assets | | | (1,737) | | | (747) | | | (551) |
Net (gain) loss on divestitures | | | (3,081) | | | — | | | — |
Losses on extinguishment of debt | | | 219 | | | 10 | | | 32 |
Unrealized gains in earnings - net | | | (1,573) | | | (343) | | | (112) |
Equity in loss from equity method investments, net of dividends or distributions | | | 33 | | | 70 | | | 205 |
Depreciation and other amortization | | | 562 | | | 325 | | | 294 |
Impairments of assets | | | 32 | | | 80 | | | 174 |
Changes in operating assets and liabilities: | | | | | | | |||
Insurance reserves | | | 2,161 | | | 1,972 | | | 1,256 |
Premiums and other receivables and payables - net | | | 226 | | | 575 | | | (47) |
Funds held relating to Fortitude Re Reinsurance Contracts | | | (1,160) | | | 2,351 | | | 3,329 |
Reinsurance assets and funds held under reinsurance treaties | | | 155 | | | 271 | | | 534 |
Capitalization of deferred policy acquisition costs | | | (1,000) | | | (889) | | | (1,168) |
Current and deferred income taxes - net | | | (70) | | | (1,930) | | | (1,359) |
Other, net | | | (686) | | | 614 | | | (524) |
Total adjustments | | | (5,823) | | | 2,461 | | | 2,138 |
Net cash provided by operating activities | | | 2,461 | | | 3,327 | | | 2,445 |
Cash flows from investing activities: | | | | | | | |||
Proceeds from (payments for) | | | | | | | |||
Sales or distributions of: | | | | | | | |||
Available for sale securities | | | 10,762 | | | 11,929 | | | 11,887 |
Other securities | | | 318 | | | 405 | | | 3,344 |
Other invested assets | | | 4,615 | | | 1,787 | | | 2,461 |
Divestitures, net | | | 1,084 | | | — | | | — |
Maturities of fixed maturity securities available for sale | | | 20,420 | | | 15,507 | | | 14,833 |
Principal payments received on mortgage and other loans receivable | | | 6,646 | | | 5,961 | | | 4,219 |
Purchases of: | | | | | | | |||
Available for sale securities | | | (36,641) | | | (35,635) | | | (35,433) |
Other securities | | | (1,591) | | | (117) | | | (76) |
Other invested assets | | | (2,498) | | | (1,962) | | | (2,420) |
Mortgage and other loans receivable | | | (7,930) | | | (5,486) | | | (8,449) |
Acquisition of businesses, net of cash and restricted cash acquired | | | — | | | — | | | (77) |
Net change in short-term investments | | | 3,439 | | | (1,237) | | | (1,845) |
Net change in derivative assets and liabilities | | | (507) | | | 1,234 | | | 1,186 |
Other, net | | | (84) | | | (295) | | | (5) |
Net cash used in investing activities | | | (1,967) | | | (7,909) | | | (10,375) |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Cash flows from financing activities: | | | | | | | |||
Proceeds from (payments for) | | | | | | | |||
Policyholder contract deposits | | | 25,387 | | | 22,438 | | | 26,114 |
Policyholder contract withdrawals | | | (22,481) | | | (17,845) | | | (19,813) |
Issuance of long-term debt | | | — | | | — | | | 250 |
Issuance of short-term debt | | | 345 | | | — | | | — |
Issuance of debt of consolidated investment entities | | | 4,683 | | | 2,314 | | | 3,266 |
Repayments of long-term debt | | | (568) | | | (11) | | | — |
Repayments of short-term debt | | | (248) | | | — | | | — |
Repayments of debt of consolidated investment entities | | | (5,125) | | | (2,451) | | | (1,580) |
Distributions to Class B shareholder | | | (34) | | | — | | | — |
Distributions to AIG | | | (1,543) | | | (472) | | | (1,624) |
Distributions to noncontrolling interests | | | (1,611) | | | (454) | | | (838) |
Contributions from noncontrolling interests | | | 296 | | | 317 | | | 316 |
Net change in securities lending and repurchase agreements | | | 9 | | | 646 | | | 1,894 |
Other, net | | | 81 | | | 184 | | | (66) |
Net cash provided by (used in) financing activities | | | (809) | | | 4,666 | | | 7,919 |
Effect of exchange rate changes on cash and restricted cash | | | (2) | | | 7 | | | — |
Net increase (decrease) in cash and restricted cash | | | (317) | | | 91 | | | (11) |
Cash and restricted cash at beginning of year | | | 918 | | | 827 | | | 838 |
Cash and restricted cash at end of year | | | $601 | | | $918 | | | $827 |
Supplementary Disclosure of Consolidated Cash Flow Information | |||||||||
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Cash | | | $537 | | | $654 | | | $596 |
Restricted cash included in Short-term investments* | | | 57 | | | 58 | | | 28 |
Restricted cash included in Other assets* | | | 7 | | | 206 | | | 203 |
Total cash and restricted cash shown in the Consolidated Statements of Cash Flows | | | $601 | | | $918 | | | $827 |
| | | | | | ||||
Cash paid during the period for: | | | | | | | |||
Interest | | | $364 | | | $279 | | | $308 |
Taxes | | | $1,913 | | | $1,915 | | | $1,191 |
Non-cash investing activities: | | | | | | | |||
Fixed maturity securities, designated available for sale, received in connection with pension risk transfer transactions | | | $(2,284) | | | $(1,140) | | | $(1,072) |
Fixed maturity securities, designated available for sale, received in connection with reinsurance transactions | | | $(161) | | | $(424) | | | $— |
Fixed maturity securities, designated available for sale, transferred in connection with reinsurance transactions | | | $647 | | | $706 | | | $551 |
Investment assets received in conjunction with fund establishment | | | $(85) | | | $(532) | | | $— |
Investment assets transferred in conjunction with fund establishment | | | $85 | | | $— | | | $— |
Corebridge distribution of AIG common stock to AIG | | | $38 | | | $— | | | $— |
Fixed maturity securities, designated as fair value option, transferred to repay debt of consolidated investment entities | | | $1,257 | | | $— | | | $— |
Fixed maturity securities, designated available for sale, transferred to repay debt of consolidated investment entities | | | $605 | | | $— | | | $— |
Minority ownership acquired in Fortitude Holdings | | | $(100) | | | $— | | | $— |
Divestiture of certain Cap Corp legal entities | | | $56 | | | $— | | | $— |
Consideration received from divested businesses | | | $3,740 | | | $— | | | $— |
Fixed maturity securities, designated available for sale, transferred to a non-consolidated Corebridge affiliate | | | $423 | | | $— | | | $— |
Fixed maturity securities, designated available for sale, transferred from a non-consolidated Corebridge affiliate | | | $(423) | | | $— | | | $— |
Non-cash financing activities: | | | | | | | |||
Interest credited to policyholder contract deposits included in financing activities | | | $3,549 | | | $3,786 | | | $3,787 |
Fee income debited to policyholder contract deposits included in financing activities | | | $(1,690) | | | $(1,710) | | | $(1,733) |
Equity interest in funds sold to Corebridge affiliates | | | $— | | | $532 | | | $— |
Repayments of debt of consolidated investment entities utilizing fixed maturity securities | | | $(1,862) | | | $— | | | $— |
Issuance of short-term debt to AIG | | | $8,300 | | | $— | | | $— |
Short-term debt forgiven by AIG | | | $(96) | | | $— | | | $— |
Non-cash capital contributions | | | $728 | | | $85 | | | $109 |
Non-cash capital distributions | | | $(12,197) | | | $(44) | | | $(41) |
* | Includes funds held for tax sharing payments to Corebridge Parent, security deposits, replacement reserve deposits related to affordable housing investments. |
1. | Overview and Basis of Presentation |
• | Valuation of future policy benefit liabilities and timing and extent of loss recognition; |
• | Valuation of liabilities for guaranteed benefit features of variable annuity products, fixed annuity products and fixed index annuity products, including the valuation of embedded derivatives; |
• | Estimated gross profits (“EGPs”) to value DAC and unearned revenue for investment-oriented products; |
• | Reinsurance assets, including the allowance for credit losses; |
• | Goodwill impairment; |
• | Allowance for credit losses primarily on loans and available for sale fixed maturity securities; |
• | Liability for legal contingencies; |
• | Fair value measurements of certain financial assets and liabilities; and |
• | Income tax assets and liabilities, including recoverability of our net deferred tax asset and the predictability of future tax operating profitability of the character necessary to realize the net deferred tax asset. |
2. | Summary of Significant Accounting Policies |
• | Fixed maturity and equity securities |
• | Other invested assets |
• | Short-term investments |
• | Net investment income |
• | Net realized gains (losses) |
• | Allowance for credit losses/Other-than-temporary impairments |
• | Mortgage and other loans receivable – net of allowance |
• | Reinsurance assets – net of allowance |
• | Deferred policy acquisition costs |
• | Value of business acquired |
• | Deferred sales inducements |
• | Amortization of deferred policy acquisition costs |
• | Non-deferrable insurance commissions |
• | Derivative assets and liabilities, at fair value |
• | Future policy benefits |
• | Policyholder contract deposits |
• | Other policyholder funds |
• | Short-term and Long-term debt |
• | Debt of consolidated investment entities |
• | Legal contingencies |
• | Requires the review and if necessary, update of future policy benefit assumptions at least annually for traditional and limited pay long duration contracts, with the recognition and separate presentation of any resulting re-measurement gain or loss (except for discount rate changes as noted above) in the income statement. |
• | Simplifies the amortization of DAC to a constant level basis over the expected term of the related contracts with adjustments for unexpected terminations, but no longer requires an impairment test. |
• | Increased disclosures of disaggregated roll-forwards of several balances, including: liabilities for future policy benefits, deferred acquisition costs, account balances, market risk benefits, separate account liabilities and information about significant inputs, judgments and methods used in measurement and changes thereto and impact of those changes. |
3. | Segment Information |
• | Individual Retirement – consists of fixed annuities, fixed index annuities, variable annuities and retail mutual funds. On February 8, 2021 the Company announced the execution of a definitive agreement with Touchstone to sell certain assets of Life and Retirement’s Retail Mutual Funds business. This Touchstone transaction closed on July 16, 2021. For further information on this sale see Note 1. |
• | Group Retirement – consists of record-keeping, plan administrative and compliance services, financial planning and advisory solutions offered to employer defined contribution plans and their participants, along with proprietary and non-proprietary annuities, advisory and brokerage products offered outside of plan. |
• | Life Insurance – primary products in the U.S. include term life and universal life insurance. The International business issues individual life, whole life and group life insurance in the United Kingdom, and distributes medical insurance in Ireland. |
• | Institutional Markets – consists of stable value wrap products, structured settlement and pension risk transfer annuities, corporate- and bank-owned life insurance, high net worth products and GICs. |
• | Corporate and Other – consists primarily of: |
– | Corporate expenses not attributable to our other segments. |
– | Interest expense on financial debt. |
– | Results of our consolidated investment entities. |
– | Institutional asset management business, which includes managing assets for non-consolidated affiliates. |
– | Results of our legacy insurance lines ceded to Fortitude Re. |
• | net pre-tax income (losses) from noncontrolling interests related to consolidated investment entities; |
• | restructuring and other costs related to initiatives designed to reduce operating expenses, improve efficiency and simplify our organization; |
• | non-recurring costs associated with the implementation of non-ordinary course legal or regulatory changes or changes to accounting principles; |
• | integration and transaction costs associated with acquiring or divesting businesses; |
• | non-operating litigation reserves and settlements; |
• | loss (gain) on extinguishment of debt; |
• | losses from the impairment of goodwill, if any; and; |
• | income and loss from divested or run-off business, if any. |
(in millions) | | | Individual Retirement | | | Group Retirement | | | Life Insurance | | | Institutional Markets | | | Corporate and Other | | | Elimi- nations | | | Total Corebridge | | | Adjust- ments | | | Total Consolidated |
2021 | | | | | | | | | | | | | | | | | | | |||||||||
Premiums | | | $191 | | | $22 | | | $1,573 | | | $3,774 | | | $86 | | | $— | | | $5,646 | | | $(9) | | | $5,637 |
Policy fees | | | 962 | | | 522 | | | 1,380 | | | 187 | | | — | | | — | | | 3,051 | | | — | | | 3,051 |
Net investment income(a) | | | 4,334 | | | 2,413 | | | 1,621 | | | 1,155 | | | 443 | | | (49) | | | 9,917 | | | 1,755 | | | 11,672 |
Net realized gains(a)(b) | | | — | | | — | | | — | | | — | | | 701 | | | — | | | 701 | | | 1,154 | | | 1,855 |
Advisory fee and other income | | | 592 | | | 337 | | | 110 | | | 2 | | | 134 | | | — | | | 1,175 | | | — | | | 1,175 |
Total adjusted revenues | | | $6,079 | | | $3,294 | | | $4,684 | | | $5,118 | | | $1,364 | | | $(49) | | | $20,490 | | | $2,900 | | | $23,390 |
Policyholder benefits | | | 580 | | | 76 | | | 3,231 | | | 4,141 | | | — | | | — | | | 8,028 | | | 22 | | | 8,050 |
Interest credited to policyholder account balances | | | 1,791 | | | 1,150 | | | 354 | | | 274 | | | — | | | — | | | 3,569 | | | (20) | | | 3,549 |
Amortization of deferred policy acquisition costs and value of business acquired | | | 744 | | | 61 | | | 164 | | | 6 | | | — | | | — | | | 975 | | | 82 | | | 1,057 |
Non-deferrable insurance commissions | | | 397 | | | 121 | | | 132 | | | 27 | | | 3 | | | — | | | 680 | | | — | | | 680 |
Advisory fee expenses | | | 189 | | | 133 | | | — | | | — | | | — | | | — | | | 322 | | | — | | | 322 |
General operating expenses | | | 437 | | | 445 | | | 682 | | | 77 | | | 375 | | | — | | | 2,016 | | | 88 | | | 2,104 |
Interest expense | | | 46 | | | 35 | | | 25 | | | 9 | | | 286 | | | (47) | | | 354 | | | 35 | | | 389 |
Loss on extinguishment of debt | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 219 | | | 219 |
(Gain) on divestitures | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (3,081) | | | (3,081) |
Net (gain) on Fortitude Re transactions | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (26) | | | (26) |
Total benefits and expenses | | | $4,184 | | | $2,021 | | | $4,588 | | | $4,534 | | | $664 | | | $(47) | | | $15,944 | | | $(2,681) | | | $13,263 |
Noncontrolling interests | | | — | | | — | | | — | | | — | | | (861) | | | — | | | (861) | | | | | ||
Adjusted pre-tax operating income (loss) | | | $1,895 | | | $1,273 | | | $96 | | | $584 | | | $(161) | | | $(2) | | | $3,685 | | | | | ||
Adjustments to: | | | | | | | | | | | | | | | | | | | |||||||||
Total revenue | | | | | | | | | | | | | | | 2,900 | | | | | ||||||||
Total expenses | | | | | | | | | | | | | | | (2,681) | | | | | ||||||||
Noncontrolling interests | | | | | | | | | | | | | | | 861 | | | | | ||||||||
Income before Income tax expense | | | | | | | | | | | | | | | $10,127 | | | | | $10,127 |
(in millions) | | | Individual Retirement | | | Group Retirement | | | Life Insurance | | | Institutional Markets | | | Corporate and Other | | | Elimi- nations | | | Total Corebridge | | | Adjust- ments | | | Total Consolidated |
2020 | | | | | | | | | | | | | | | | | | | |||||||||
Premiums | | | $151 | | | $19 | | | $1,526 | | | $2,564 | | | $74 | | | $— | | | $4,334 | | | $7 | | | $4,341 |
Policy fees | | | 861 | | | 443 | | | 1,384 | | | 186 | | | — | | | — | | | 2,874 | | | — | | | 2,874 |
Net Investment income(a) | | | 4,105 | | | 2,213 | | | 1,532 | | | 931 | | | 346 | | | (43) | | | 9,084 | | | 1,432 | | | 10,516 |
Net realized gains (losses)(a)(b) | | | — | | | — | | | — | | | — | | | 54 | | | — | | | 54 | | | (3,795) | | | (3,741) |
Advisory fee and other income | | | 571 | | | 272 | | | 94 | | | 1 | | | 122 | | | — | | | 1,060 | | | 12 | | | 1,072 |
Total adjusted revenues | | | $5,688 | | | $2,947 | | | $4,536 | | | $3,682 | | | $596 | | | $(43) | | | $17,406 | | | $(2,344) | | | $15,062 |
Policyholder benefits | | | 411 | | | 74 | | | 3,219 | | | 2,886 | | | — | | | — | | | 6,590 | | | 12 | | | 6,602 |
Interest credited to policyholder account balances | | | 1,751 | | | 1,125 | | | 373 | | | 303 | | | — | | | — | | | 3,552 | | | (24) | | | 3,528 |
Amortization of deferred policy acquisition costs and value of business acquired | | | 556 | | | 15 | | | 25 | | | 5 | | | — | | | — | | | 601 | | | (58) | | | 543 |
Non-deferrable insurance commissions | | | 334 | | | 117 | | | 119 | | | 31 | | | 3 | | | — | | | 604 | | | — | | | 604 |
Advisory fee expenses | | | 205 | | | 111 | | | — | | | — | | | — | | | — | | | 316 | | | — | | | 316 |
General operating expenses | | | 427 | | | 488 | | | 624 | | | 79 | | | 309 | | | (7) | | | 1,920 | | | 107 | | | 2,027 |
Interest expense | | | 62 | | | 42 | | | 30 | | | 11 | | | 324 | | | (34) | | | 435 | | | 55 | | | 490 |
Loss on extinguishment of debt | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 10 | | | 10 |
Net loss on Fortitude Re transactions | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 91 | | | 91 |
Total benefits and expenses | | | $3,746 | | | $1,972 | | | $4,390 | | | $3,315 | | | $636 | | | $(41) | | | $14,018 | | | $193 | | | $14,211 |
Noncontrolling interests | | | — | | | — | | | — | | | — | | | (194) | | | — | | | (194) | | | | | ||
Adjusted pre-tax operating income (loss) | | | $1,942 | | | $975 | | | $146 | | | $367 | | | $(234) | | | $(2) | | | $3,194 | | | | | ||
Adjustments to: | | | | | | | | | | | | | | | | | | | |||||||||
Total revenue | | | | | | | | | | | | | | | (2,344) | | | | | ||||||||
Total expenses | | | | | | | | | | | | | | | 193 | | | | | ||||||||
Noncontrolling interests | | | | | | | | | | | | | | | 194 | | | | | ||||||||
Income before Income tax (benefit) | | | | | | | | | | | | | | | $851 | | | | | $851 |
(in millions) | | | Individual Retirement | | | Group Retirement | | | Life Insurance | | | Institutional Markets | | | Corporate and Other | | | Elimi- nations | | | Total Corebridge | | | Adjust- ments | | | Total Consolidated |
2019 | | | | | | | | | | | | | | | | | | | |||||||||
Premiums | | | $104 | | | $16 | | | $1,438 | | | $1,877 | | | $58 | | | $— | | | $3,493 | | | $8 | | | $3,501 |
Policy fees | | | 811 | | | 429 | | | 1,503 | | | 188 | | | — | | | — | | | 2,931 | | | (1) | | | 2,930 |
Net Investment income(a) | | | 4,163 | | | 2,262 | | | 1,503 | | | 902 | | | 211 | | | (20) | | | 9,021 | | | 1,753 | | | 10,774 |
Net realized gains (losses)(a)(b) | | | — | | | — | | | — | | | — | | | 285 | | | — | | | 285 | | | (5,349) | | | (5,064) |
Advisory fee and other income | | | 606 | | | 261 | | | 86 | | | 1 | | | 114 | | | — | | | 1,068 | | | 1 | | | 1,069 |
Total adjusted revenues | | | $5,684 | | | $2,968 | | | $4,530 | | | $2,968 | | | $668 | | | $(20) | | | $16,798 | | | $(3,588) | | | $13,210 |
Policyholder benefits | | | 391 | | | 63 | | | 2,708 | | | 2,174 | | | — | | | — | | | 5,336 | | | (1) | | | 5,335 |
Interest credited to policyholder account balances | | | 1,726 | | | 1,147 | | | 374 | | | 356 | | | — | | | — | | | 3,603 | | | 11 | | | 3,614 |
Amortization of deferred policy acquisition costs and value of business acquired | | | 480 | | | 81 | | | 140 | | | 5 | | | — | | | — | | | 706 | | | (32) | | | 674 |
Non-deferrable insurance commissions | | | 318 | | | 113 | | | 99 | | | 31 | | | 3 | | | — | | | 564 | | | — | | | 564 |
Advisory fee expenses | | | 219 | | | 103 | | | — | | | — | | | — | | | — | | | 322 | | | — | | | 322 |
General operating expenses | | | 468 | | | 459 | | | 657 | | | 69 | | | 295 | | | (6) | | | 1,942 | | | 33 | | | 1,975 |
Interest expense | | | 72 | | | 44 | | | 30 | | | 11 | | | 367 | | | (13) | | | 511 | | | 44 | | | 555 |
Loss on extinguishment of debt | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 32 | | | 32 |
Net (gain) loss on Fortitude Re transactions | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Total benefits and expenses | | | $3,674 | | | $2,010 | | | $4,008 | | | $2,646 | | | $665 | | | $(19) | | | $12,984 | | | $87 | | | $13,071 |
Noncontrolling interests | | | — | | | — | | | — | | | — | | | (230) | | | — | | | (230) | | | | | ||
Adjusted pre-tax operating income (loss) | | | $2,010 | | | $958 | | | $522 | | | $322 | | | $(227) | | | $(1) | | | $3,584 | | | $ | | | |
Adjustments to: | | | | | | | | | | | | | | | | | | | |||||||||
Total revenue | | | | | | | | | | | | | | | (3,588) | | | | | ||||||||
Total expenses | | | | | | | | | | | | | | | 87 | | | | | ||||||||
Noncontrolling interests | | | | | | | | | | | | | | | 230 | | | | | ||||||||
Income before Income tax (benefit) | | | | | | | | | | | | | | | $139 | | | | | $139 |
(a) | Adjustments include Fortitude Re activity. This is comprised of $2,012 million, $(1,549) million and $(3,307) million for the years ended December 31, 2021, 2020 and 2019 respectively. |
(b) | Net realized gains (losses) includes the gains (losses) related to the disposition of real estate investments. |
| | Total Revenues* | | | Real Estate and Other Fixed Assets, Net of Accumulated Depreciation | |||||||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 | | | 2021 | | | 2020 | | | 2019 |
North America | | | $22,866 | | | $14,642 | | | $12,845 | | | $286 | | | $364 | | | $357 |
International | | | 524 | | | 420 | | | 365 | | | 37 | | | 39 | | | 37 |
Consolidated | | | $23,390 | | | $15,062 | | | $13,210 | | | $323 | | | $403 | | | $394 |
* | Revenues are generally reported according to the geographic location of the legal entity. International revenues consist of revenues from Laya and AIG Life (UK). |
• | Level 1: Fair value measurements based on quoted prices (unadjusted) in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. We do not adjust the quoted price for such instruments. |
• | Level 2: Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. |
• | Level 3: Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we must make certain assumptions about the inputs a hypothetical market participant would use to value that asset or liability. |
• | Our Own Credit Risk. Fair value measurements for certain liabilities incorporate our own credit risk by determining the explicit cost for each counterparty to protect against its net credit exposure to us at the balance sheet date by reference to observable AIG credit default swaps (“CDS”) or cash bond spreads. We calculate the effect of credit spread changes using discounted cash flow techniques that incorporate current market interest rates. A derivative counterparty’s net credit exposure to us is determined based on master netting agreements, when applicable, which take into consideration all derivative positions with us, as well as collateral we post with the counterparty at the balance sheet date. We also incorporate our own risk of non-performance in the valuation of the embedded derivatives associated with variable annuity and fixed index annuity and life contracts. The non-performance risk adjustment (“NPA”) reflects a market participant’s view of our claims-paying ability by incorporating an additional spread to the swap curve used to discount projected benefit cash flows in the valuation of these embedded derivatives. The non-performance risk adjustment is calculated by constructing forward rates based on a weighted average of observable corporate credit indices to approximate the claims-paying ability rating of our insurance operations companies. |
• | Counterparty Credit Risk. Fair value measurements for freestanding derivatives incorporate counterparty credit by determining the explicit cost for us to protect against our net credit exposure to each counterparty at the balance sheet date by reference to observable counterparty CDS spreads, when available. When not available, other directly or indirectly observable credit spreads will be used to derive the best estimates of the counterparty spreads. Our net credit exposure to a counterparty is determined based on master netting agreements, which take into consideration all derivative positions with the counterparty, as well as collateral posted by the counterparty at the balance sheet date. |
December 31, 2021 (in millions) | | | Level 1 | | | Level 2 | | | Level 3 | | | Counterparty Netting(a) | | | Cash Collateral | | | Total |
Assets: | | | | | | | | | | | | | ||||||
Bonds available for sale: | | | | | | | | | | | | | ||||||
U.S. government and government sponsored entities | | | $— | | | $1,712 | | | $— | | | $— | | | $— | | | $1,712 |
December 31, 2021 (in millions) | | | Level 1 | | | Level 2 | | | Level 3 | | | Counterparty Netting(a) | | | Cash Collateral | | | Total |
Obligations of states, municipalities and political subdivisions | | | — | | | 7,281 | | | 1,395 | | | — | | | — | | | 8,676 |
Non-U.S. governments | | | 7 | | | 6,390 | | | — | | | — | | | — | | | 6,397 |
Corporate debt | | | — | | | 138,156 | | | 1,907 | | | — | | | — | | | 140,063 |
RMBS(b) | | | — | | | 7,363 | | | 7,595 | | | — | | | — | | | 14,958 |
CMBS | | | — | | | 10,228 | | | 1,072 | | | — | | | — | | | 11,300 |
CLO/ABS(c) | | | — | | | 5,024 | | | 10,438 | | | — | | | — | | | 15,462 |
Total bonds available for sale | | | 7 | | | 176,154 | | | 22,407 | | | — | | | — | | | 198,568 |
Other bond securities: | | | | | | | | | | | | | ||||||
Obligations of states, municipalities and political subdivisions | | | — | | | 50 | | | — | | | — | | | — | | | 50 |
Non-U.S. governments | | | — | | | 17 | | | — | | | — | | | — | | | 17 |
Corporate debt | | | — | | | 866 | | | 134 | | | — | | | — | | | 1,000 |
RMBS(d) | | | — | | | 93 | | | 106 | | | — | | | — | | | 199 |
CMBS | | | — | | | 201 | | | 33 | | | — | | | — | | | 234 |
CLO/ABS | | | — | | | 228 | | | 354 | | | — | | | — | | | 582 |
Total other bond securities | | | — | | | 1,455 | | | 627 | | | — | | | — | | | 2,082 |
Equity securities(e) | | | 238 | | | 2 | | | 2 | | | — | | | — | | | 242 |
Other invested assets(f) | | | — | | | — | | | 1,892 | | | — | | | — | | | 1,892 |
Derivative assets: | | | | | | | | | | | | | ||||||
Interest rate contracts | | | — | | | 1,911 | | | — | | | — | | | — | | | 1,911 |
Foreign exchange contracts | | | — | | | 672 | | | — | | | — | | | — | | | 672 |
Equity contracts | | | 7 | | | 4,184 | | | 479 | | | — | | | — | | | 4,670 |
Credit contracts | | | — | | | — | | | 1 | | | — | | | — | | | 1 |
Other contracts | | | — | | | 1 | | | 12 | | | — | | | — | | | 13 |
Counterparty netting and cash collateral | | | — | | | — | | | — | | | (5,785) | | | (798) | | | (6,583) |
Total derivative assets | | | 7 | | | 6,768 | | | 492 | | | (5,785) | | | (798) | | | 684 |
Short-term investments | | | 1 | | | 1,454 | | | — | | | — | | | — | | | 1,455 |
Separate account assets | | | 105,221 | | | 3,890 | | | — | | | — | | | — | | | 109,111 |
Total | | | $105,474 | | | $189,723 | | | $25,420 | | | $(5,785) | | | $(798) | | | $314,034 |
Liabilities: | | | | | | | | | | | | | ||||||
Policyholder contract deposits(g) | | | $— | | | $130 | | | $9,694 | | | $— | | | $— | | | $9,824 |
Derivative liabilities: | | | | | | | | | | | | | ||||||
Interest rate contracts | | | 1 | | | 1,575 | | | — | | | — | | | — | | | 1,576 |
Foreign exchange contracts | | | — | | | 366 | | | — | | | — | | | — | | | 366 |
Equity contracts | | | 1 | | | 4,048 | | | 22 | | | — | | | — | | | 4,071 |
Credit contracts | | | — | | | — | | | — | | | — | | | — | | | — |
Other contracts | | | — | | | — | | | — | | | — | | | — | | | — |
Counterparty netting and cash collateral | | | — | | | — | | | — | | | (5,785) | | | (37) | | | (5,822) |
Total derivative liabilities | | | 2 | | | 5,989 | | | 22 | | | (5,785) | | | (37) | | | 191 |
Fortitude Re funds withheld payable(h) | | | $— | | | $— | | | $7,974 | | | $— | | | $— | | | $7,974 |
Debt of consolidated investment entities | | | — | | | — | | | 5 | | | — | | | — | | | 5 |
Total | | | $2 | | | $6,119 | | | $17,695 | | | $(5,785) | | | $(37) | | | $17,994 |
December 31, 2020 (in millions) | | | Level 1 | | | Level 2 | | | Level 3 | | | Counterparty Netting(a) | | | Cash Collateral | | | Total |
Assets: | | | | | | | | | | | | | ||||||
Bonds available for sale: | | | | | | | | | | | | | ||||||
U.S. government and government sponsored entities | | | $— | | | $1,896 | | | $— | | | $— | | | $— | | | $1,896 |
Obligations of states, municipalities and political subdivisions | | | — | | | 7,512 | | | 2,057 | | | — | | | — | | | 9,569 |
Non-U.S. governments | | | 1 | | | 5,737 | | | — | | | — | | | — | | | 5,738 |
Corporate debt | | | — | | | 135,705 | | | 1,709 | | | — | | | — | | | 137,414 |
RMBS(b) | | | — | | | 9,757 | | | 8,104 | | | — | | | — | | | 17,861 |
CMBS | | | — | | | 10,473 | | | 886 | | | — | | | — | | | 11,359 |
CLO/ABS(c) | | | — | | | 5,216 | | | 8,888 | | | — | | | — | | | 14,104 |
Total bonds available for sale | | | 1 | | | 176,296 | | | 21,644 | | | — | | | — | | | 197,941 |
Other bond securities: | | | | | | | | | | | | | ||||||
Obligations of states, municipalities and political subdivisions | | | — | | | — | | | — | | | — | | | — | | | — |
Non-U.S. governments | | | — | | | — | | | — | | | — | | | — | | | — |
Corporate debt | | | — | | | — | | | — | | | — | | | — | | | — |
RMBS(d) | | | — | | | 107 | | | 96 | | | — | | | — | | | 203 |
CMBS | | | — | | | 173 | | | 45 | | | — | | | — | | | 218 |
CLO/ABS | | | — | | | 166 | | | 193 | | | — | | | — | | | 359 |
Total other bond securities | | | — | | | 446 | | | 334 | | | — | | | — | | | 780 |
Equity securities(e) | | | 517 | | | 50 | | | 42 | | | — | | | — | | | 609 |
Other invested assets(f) | | | — | | | — | | | 1,771 | | | — | | | — | | | 1,771 |
Derivative assets: | | | | | | | | | | | | | ||||||
Interest rate contracts | | | — | | | 1,804 | | | — | | | — | | | — | | | 1,804 |
Foreign exchange contracts | | | — | | | 472 | | | — | | | — | | | — | | | 472 |
Equity contracts | | | 9 | | | 6,515 | | | 195 | | | — | | | — | | | 6,719 |
Credit contracts | | | — | | | — | | | 2 | | | — | | | — | | | 2 |
Other contracts | | | — | | | 1 | | | 13 | | | — | | | — | | | 14 |
Counterparty netting and cash collateral | | | — | | | — | | | — | | | (7,723) | | | (533) | | | (8,256) |
Total derivative assets | | | 9 | | | 8,792 | | | 210 | | | (7,723) | | | (533) | | | 755 |
Short-term investments | | | 534 | | | 3,317 | | | — | | | — | | | — | | | 3,851 |
Separate account assets | | | 96,560 | | | 3,730 | | | — | | | — | | | — | | | 100,290 |
Total | | | $97,621 | | | $192,631 | | | $24,001 | | | $(7,723) | | | $(533) | | | $305,997 |
Liabilities: | | | | | | | | | | | | | ||||||
Policyholder contract deposits(g) | | | $— | | | $83 | | | $10,038 | | | $— | | | $— | | | $10,121 |
Derivative liabilities: | | | | | | | | | | | | | ||||||
Interest rate contracts | | | 1 | | | 1,467 | | | — | | | — | | | — | | | 1,468 |
Foreign exchange contracts | | | — | | | 685 | | | — | | | — | | | — | | | 685 |
Equity contracts | | | 14 | | | 5,774 | | | 49 | | | — | | | — | | | 5,837 |
Credit contracts | | | — | | | — | | | — | | | — | | | — | | | — |
Other contracts | | | — | | | — | | | 6 | | | — | | | — | | | 6 |
Counterparty netting and cash collateral | | | — | | | — | | | — | | | (7,723) | | | (28) | | | (7,751) |
December 31, 2020 (in millions) | | | Level 1 | | | Level 2 | | | Level 3 | | | Counterparty Netting(a) | | | Cash Collateral | | | Total |
Total derivative liabilities | | | 15 | | | 7,926 | | | 55 | | | (7,723) | | | (28) | | | 245 |
Fortitude Re funds withheld payable(h) | | | — | | | — | | | 7,749 | | | — | | | — | | | 7,749 |
Debt of consolidated investment entities | | | — | | | — | | | 950 | | | — | | | — | | | 950 |
Total | | | $15 | | | $8,009 | | | $18,792 | | | $(7,723) | | | $(28) | | | $19,065 |
(a) | Represents netting of derivative exposures covered by qualifying master netting agreements. |
(b) | Includes investments in RMBS issued by related parties of $38 million and $9 million classified as Level 2 and Level 3, respectively, as of December 31, 2021. Additionally, includes investments in RMBS issued by related parties of $35 million and $14 million classified as Level 2 and Level 3, respectively, as of December 31, 2020. |
(c) | Includes investments in CLO/ABS issued by related parties of $862 million classified as Level 3 as of December 31, 2021. Additionally, includes investments in CLO/ABS issued by related parties of $1.0 billion classified as Level 3 as of December 31, 2020. |
(d) | Includes investments in RMBS issued by related parties of $0.2 million classified as Level 2 as of December 31, 2021. Additionally, includes investments in RMBS issued by related parties of $0.6 million classified as Level 2 as of December 31, 2020. |
(e) | There were no investments in equity securities issued by related parties classified as Level 1 as of December 31, 2021. Additionally, includes investments in equity securities issued by related parties of $31 million classified as Level 1 as of December 31, 2020. |
(f) | Excludes investments that are measured at fair value using the net asset value (NAV) per share (or its equivalent), which totaled $5.2 billion and $3.4 billion as of December 31, 2021 and December 31, 2020, respectively. |
(g) | Excludes basis adjustments for fair value hedges. |
(h) | As discussed in Note 7, the Fortitude Re funds withheld payable is created through modco and funds withheld reinsurance arrangements where the investments supporting the reinsurance agreements are withheld by and continue to reside on Corebridge’s balance sheet. This embedded derivative is valued as a total return swap with reference to the fair value of the invested assets held by Corebridge, which are primarily available for sale securities. |
(in millions) | | | Fair Value Beginning of Year | | | Net Realized and Unrealized Gains (Losses) Included in Income | | | Other Comprehensive (Income) Loss | | | Purchases, Sales, Issuances and Settlements, Net | | | Gross Transfers In | | | Gross Transfers Out | | | Other | | | Fair Value End of Year | | | Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Year | | | Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (loss) for Recurring Level 3 Instruments Held at End of Year |
December 31, 2021 | | | | | | | | | | | | | | | | | | | | | ||||||||||
Assets: | | | | | | | | | | | | | | | | | | | | | ||||||||||
Bonds available for sale: | | | | | | | | | | | | | | | | | | | | | ||||||||||
Obligations of states, municipalities and political subdivisions | | | $2,057 | | | $7 | | | $(5) | | | $(342) | | | $— | | | $(260) | | | $(62) | | | $1,395 | | | $— | | | $141 |
Corporate debt | | | 1,709 | | | (10) | | | (25) | | | 109 | | | 373 | | | (249) | | | — | | | 1,907 | | | — | | | (180) |
RMBS | | | 8,104 | | | 415 | | | (104) | | | (782) | | | 8 | | | (46) | | | — | | | 7,595 | | | — | | | (185) |
CMBS | | | 886 | | | 25 | | | (45) | | | 253 | | | 53 | | | (100) | | | — | | | 1,072 | | | — | | | 36 |
CLO/ABS | | | 8,888 | | | 24 | | | (270) | | | 1,990 | | | 655 | | | (849) | | | — | | | 10,438 | | | — | | | (437) |
Total bonds available for sale(a) | | | 21,644 | | | 461 | | | (449) | | | 1,228 | | | 1,089 | | | (1,504) | | | (62) | | | 22,407 | | | — | | | (625) |
Other bond securities: | | | | | | | | | | | | | | | | | | | | | ||||||||||
Corporate debt | | | — | | | (1) | | | — | | | 135 | | | — | | | — | | | — | | | 134 | | | (1) | | | — |
RMBS | | | 96 | | | 2 | | | — | | | 8 | | | — | | | — | | | — | | | 106 | | | (2) | | | — |
CMBS | | | 45 | | | — | | | — | | | (17) | | | 5 | | | — | | | — | | | 33 | | | (3) | | | — |
CLO/ABS | | | 193 | | | (4) | | | — | | | 165 | | | — | | | — | | | — | | | 354 | | | (27) | | | — |
Total other bond securities | | | 334 | | | (3) | | | — | | | 291 | | | 5 | | | — | | | — | | | 627 | | | (33) | | | — |
Equity securities | | | 42 | | | 11 | | | — | | | (120) | | | 70 | | | (1) | | | — | | | 2 | | | 3 | | | — |
Other invested assets | | | 1,771 | | | 641 | | | (15) | | | (569) | | | 64 | | | — | | | — | | | 1,892 | | | 612 | | | — |
Total | | | $23,791 | | | $1,110 | | | $(464) | | | $830 | | | $1,228 | | | $(1,505) | | | $(62) | | | $24,928 | | | $582 | | | $(625) |
(in millions) | | | Fair Value Beginning of Year | | | Net Realized and Unrealized (Gains) Losses Included in Income | | | Other Comprehensive (Income) Loss | | | Purchases, Sales, Issuances and Settlements, Net | | | Gross Transfers In | | | Gross Transfers Out | | | Other | | | Fair Value End of Year | | | Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Year | | | Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Year |
Liabilities: | | | | | | | | | | | | | | | | | | | | | ||||||||||
Policyholder contract deposits | | | $10,038 | | | $(769) | | | $— | | | $479 | | | $— | | | $(54) | | | $— | | | $9,694 | | | $1,860 | | | $— |
Derivative liabilities, net: | | | — | | | | | | | | | | | | | | | | | | | |||||||||
Interest rate contracts | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Foreign exchange contracts | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Equity contracts | | | (146) | | | (22) | | | — | | | (271) | | | (71) | | | 53 | | | — | | | (457) | | | 19 | | | — |
Credit Contracts | | | (2) | | | 11 | | | — | | | (10) | | | — | | | — | | | — | | | (1) | | | (2) | | | — |
Other contracts | | | (7) | | | (62) | | | — | | | 57 | | | — | | | — | | | — | | | (12) | | | 63 | | | — |
Total derivative liabilities, net(b) | | | (155) | | | (73) | | | — | | | (224) | | | (71) | | | 53 | | | — | | | (470) | | | 80 | | | — |
Fortitude Re funds withheld Payable | | | 7,749 | | | 687 | | | — | | | (462) | | | — | | | — | | | — | | | 7,974 | | | 1,766 | | | — |
Debt of consolidated investment entities | | | 951 | | | 179 | | | — | | | (1,125) | | | — | | | — | | | — | | | 5 | | | 4 | | | — |
Total | | | $18,583 | | | $24 | | | $— | | | $(1,332) | | | $(71) | | | $(1) | | | $— | | | $17,203 | | | $3,710 | | | $— |
(in millions) | | | Fair Value Beginning of Year | | | Net Realized and Unrealized Gains (Losses) Included in Income | | | Other Comprehensive Income (Loss) | | | Purchases, Sales, Issuances and Settlements, Net | | | Gross Transfers In | | | Gross Transfers Out | | | Fair Value End of Year | | | Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Year | | | Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Year |
December 31, 2020 | | | | | | | | | | | | | | | | | | | |||||||||
Assets: | | | | | | | | | | | | | | | | | | | |||||||||
Bonds available for sale: | | | | | | | | | | | | | | | | | | | |||||||||
Obligations of states, municipalities and political subdivisions | | | $2,067 | | | $7 | | | $210 | | | $121 | | | $27 | | | $(375) | | | $2,057 | | | $— | | | $207 |
Corporate debt | | | 1,164 | | | (75) | | | 30 | | | 116 | | | 962 | | | (488) | | | 1,709 | | | — | | | 55 |
RMBS | | | 8,674 | | | 497 | | | (202) | | | (575) | | | 8 | | | (298) | | | 8,104 | | | — | | | (42) |
CMBS | | | 856 | | | 18 | | | 47 | | | 12 | | | 23 | | | (70) | | | 886 | | | — | | | 48 |
CLO/ABS | | | 6,517 | | | 37 | | | 156 | | | 667 | | | 2,172 | | | (661) | | | 8,888 | | | — | | | 166 |
Total bonds available for sale | | | 19,278 | | | 484 | | | 241 | | | 341 | | | 3,192 | | | (1,892) | | | 21,644 | | | — | | | 434 |
Other bond securities: | | | | | | | | | | | | | | | | | | | |||||||||
RMBS | | | 96 | | | 5 | | | — | | | (4) | | | — | | | (1) | | | 96 | | | 2 | | | — |
CMBS | | | 46 | | | (1) | | | — | | | — | | | — | | | — | | | 45 | | | (1) | | | — |
CLO/ABS | | | 243 | | | 45 | | | — | | | (95) | | | — | | | — | | | 193 | | | 26 | | | — |
Total other bond securities | | | 385 | | | 49 | | | — | | | (99) | | | — | | | (1) | | | 334 | | | 27 | | | — |
Equity securities | | | — | | | (1) | | | 1 | | | 41 | | | 2 | | | (1) | | | 42 | | | — | | | — |
Other invested assets | | | 784 | | | 96 | | | (4) | | | 745 | | | 150 | | | — | | | 1,771 | | | 61 | | | — |
Total | | | $20,447 | | | $628 | | | $238 | | | $1,028 | | | $3,344 | | | $(1,894) | | | $23,791 | | | $88 | | | $434 |
(in millions) | | | Fair Value Beginning of Year | | | Net Realized and Unrealized (Gains) Losses Included in Income | | | Other Comprehensive (Income) Loss | | | Purchases, Sales, Issuances and Settlements, Net | | | Gross Transfers In | | | Gross Transfers Out | | | Fair Value End of Year | | | Changes in Unrealized Gains (Losses) Included in Income on Instruments Held at End of Year | | | Changes in Unrealized Gains (Losses) Included in Other Comprehensive Income (Loss) for Recurring Level 3 Instruments Held at End of Year |
Liabilities: | | | | | | | | | | | | | | | | | | | |||||||||
Policyholder contract deposits | | | $7,073 | | | $2,757 | | | $— | | | $208 | | | $— | | | $— | | | $10,038 | | | $(1,515) | | | $— |
Derivative liabilities, net: | | | | | | | | | | | | | | | | | | | |||||||||
Interest rate contracts | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Foreign exchange contracts | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Equity contracts | | | (144) | | | 5 | | | — | | | (10) | | | — | | | 3 | | | (146) | | | (34) | | | — |
Credit contracts | | | (3) | | | (42) | | | — | | | 43 | | | — | | | — | | | (2) | | | (2) | | | — |
Other contracts | | | (6) | | | (57) | | | — | | | 56 | | | — | | | — | | | (7) | | | 57 | | | — |
Total derivative liabilities, net(b) | | | (153) | | | (94) | | | — | | | 89 | | | — | | | 3 | | | (155) | | | 21 | | | — |
Fortitude Re funds withheld Payable | | | 4,412 | | | 3,978 | | | — | | | (641) | | | — | | | — | | | 7,749 | | | (1,815) | | | — |
Debt of consolidated investment entities | | | 845 | | | 102 | | | — | | | 3 | | | — | | | — | | | 950 | | | (102) | | | — |
Total | | | $12,177 | | | $6,743 | | | $— | | | $(341) | | | $— | | | $3 | | | $18,582 | | | $(3,411) | | | $— |
(a) | As a result of the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020, credit losses are included in net realized and unrealized (gains) losses included in income. |
(b) | Total Level 3 derivative exposures have been netted in these tables for presentation purposes only. |
(in millions) | | | Policy Fees | | | Net Investment Income | | | Net Realized Gains (Losses) | | | Interest Expense / Loss on Extinguishment of Debt | | | Total |
December 31, 2021 | | | | | | | | | | | |||||
Assets: | | | | | | | | | | | |||||
Bonds available for sale(a) | | | $— | | | $472 | | | $(11) | | | $— | | | $461 |
Other bond securities | | | — | | | (3) | | | — | | | — | | | (3) |
Equity securities | | | — | | | 11 | | | — | | | — | | | 11 |
Other invested assets | | | — | | | 630 | | | 11 | | | — | | | 641 |
Liabilities: | | | | | | | | | | | |||||
Policyholder contract deposits | | | $— | | | $— | | | $(769) | | | $— | | | $(769) |
Derivative liabilities, net | | | (59) | | | — | | | (14) | | | — | | | (73) |
Fortitude Re funds withheld payable | | | — | | | — | | | 687 | | | — | | | 687 |
Debt of consolidated investment entities(b) | | | — | | | — | | | — | | | 179 | | | 179 |
December 31, 2020 | | | | | | | | | | | |||||
Assets: | | | | | | | | | | | |||||
Bonds available for sale(a) | | | $— | | | $497 | | | $(13) | | | $— | | | $484 |
Other bond securities | | | — | | | 49 | | | — | | | — | | | 49 |
Equity securities | | | — | | | (1) | | | — | | | — | | | (1) |
Other invested assets | | | — | | | 94 | | | 2 | | | — | | | 96 |
Liabilities: | | | | | | | | | | | |||||
Policyholder contract deposits | | | $— | | | $— | | | $2,757 | | | $— | | | $2,757 |
Derivative liabilities, net | | | (59) | | | — | | | (35) | | | — | | | (94) |
Fortitude Re funds withheld payable | | | — | | | — | | | 3,978 | | | — | | | 3,978 |
Debt of consolidated investment entities(b) | | | — | | | — | | | — | | | 102 | | | 102 |
(a) | As a result of the adoption of the Financial Instruments Credit Losses Standard on January 1, 2020, credit losses are included in net realized gains (losses). |
(b) | For the twelve months ended December 31, 2021, includes $145 million of loss on extinguishment of debt, and $34 million of interest expense. For the twelve months ended December 31, 2020, includes $102 million of interest expense. |
(in millions) | | | Purchases | | | Sales | | | Issuances and Settlements* | | | Purchases, Sales, Issuances and Settlements, Net* |
December 31, 2021 | | | | | | | | | ||||
Assets: | | | | | | | | | ||||
Bonds available for sale: | | | | | | | | | ||||
Obligations of states, municipalities and political subdivisions | | | $36 | | | $(212) | | | $(166) | | | $(342) |
Corporate debt | | | 424 | | | (36) | | | (279) | | | 109 |
RMBS | | | 637 | | | (1) | | | (1,418) | | | (782) |
CMBS | | | 334 | | | (15) | | | (66) | | | 253 |
CLO/ABS | | | 4,125 | | | (21) | | | (2,114) | | | 1,990 |
Total bonds available for sale | | | 5,556 | | | (285) | | | (4,043) | | | 1,228 |
Other bond securities: | | | | | | | | | ||||
Corporate debt | | | 86 | | | — | | | 49 | | | 135 |
RMBS | | | 28 | | | — | | | (20) | | | 8 |
CMBS | | | — | | | (17) | | | — | | | (17) |
CLO/ABS | | | 214 | | | — | | | (49) | | | 165 |
Total other bond securities | | | 328 | | | (17) | | | (20) | | | 291 |
Equity securities | | | 2 | | | — | | | (122) | | | (120) |
Other invested assets | | | 578 | | | — | | | (1,147) | | | (569) |
Total assets | | | $6,464 | | | $(302) | | | $(5,332) | | | $830 |
Liabilities: | | | | | | | | | ||||
Policyholder contract deposits | | | $— | | | $812 | | | $(333) | | | $479 |
Derivative liabilities, net | | | (272) | | | — | | | 48 | | | (224) |
Fortitude Re funds withheld payable | | | — | | | — | | | (462) | | | (462) |
Debt of consolidated investment entities | | | — | | | — | | | (1,125) | | | (1,125) |
Total liabilities | | | $(272) | | | $812 | | | $(1,872) | | | $(1,332) |
December 31, 2020 | | | | | | | | | ||||
Assets: | | | | | | | | | ||||
Bonds available for sale: | | | | | | | | | ||||
Obligations of states, municipalities and political subdivisions | | | $216 | | | $(20) | | | $(75) | | | $121 |
Corporate debt | | | 230 | | | (20) | | | (94) | | | 116 |
RMBS | | | 872 | | | — | | | (1,447) | | | (575) |
CMBS | | | 66 | | | (17) | | | (37) | | | 12 |
CLO/ABS | | | 1,898 | | | (387) | | | (844) | | | 667 |
Total bonds available for sale | | | 3,282 | | | (444) | | | (2,497) | | | 341 |
Corporate debt | | | — | | | — | | | — | | | — |
RMBS | | | 22 | | | — | | | (26) | | | (4) |
CMBS | | | — | | | — | | | — | | | — |
CLO/ABS | | | 35 | | | (53) | | | (77) | | | (95) |
Total other bond securities | | | 57 | | | (53) | | | (103) | | | (99) |
Equity securities | | | 36 | | | — | | | 5 | | | 41 |
Other invested assets | | | 793 | | | — | | | (48) | | | 745 |
Total assets | | | $4,168 | | | $(497) | | | $(2,643) | | | $1,028 |
(in millions) | | | Purchases | | | Sales | | | Issuances and Settlements* | | | Purchases, Sales, Issuances and Settlements, Net* |
Liabilities: | | | | | | | | | ||||
Policyholder contract deposits | | | $— | | | $714 | | | $(506) | | | $208 |
Derivative liabilities, net | | | (65) | | | — | | | 154 | | | 89 |
Fortitude Re funds withheld payable | | | — | | | — | | | (641) | | | (641) |
Debt of consolidated investment entities | | | 3 | | | — | | | — | | | 3 |
Total liabilities | | | $(62) | | | $714 | | | $(993) | | | $(341) |
* | There were no issuances during the years ended December 31, 2021 and 2020. |
(in millions) | | | Fair Value at December 31, 2021 | | | Valuation Technique | | | Unobservable Input(a) | | | Range (Weighted Average)(b) |
Assets: | | | | | | | | | ||||
Obligations of states, municipalities and political subdivisions | | | $1,364 | | | Discounted cash flow | | | Yield | | | 2.92% - 3.27% (3.10%) |
Corporate debt | | | 1,789 | | | Discounted cash flow | | | Yield | | | 1.75% - 7.05% (4.40%) |
RMBS(d) | | | 7,141 | | | Discounted cash flow | | | Constant prepayment rate | | | 5.18% - 18.41% (11.79%) |
| | | | | | Loss severity | | | 24.87% - 72.64% (48.75%) | |||
| | | | | | Constant default rate | | | 1.01% - 5.74% (3.37%) | |||
| | | | | | Yield | | | 1.72% - 4.08% (2.90%) | |||
CLO/ABS(d) | | | 8,251 | | | Discounted cash flow | | | Yield | | | 2.07% - 4.19% (3.13%) |
CMBS | | | 887 | | | Discounted cash flow | | | Yield | | | 1.54% - 4.49% (3.02%) |
Liabilities(e): | | | | | | | | | ||||
Embedded derivatives within Policyholder contract deposits: | | | | | | | | | ||||
Variable annuity guaranteed minimum withdrawal benefits (GMWB) | | | 2,472 | | | Discounted cash flow | | | Equity volatility | | | 5.95%- 46.65% |
| | | | | | Base lapse rate | | | 0.16%- 12.60% | |||
| | | | | | Dynamic lapse multiplier(c) | | | 20%- 186% | |||
| | | | | | Mortality multiplier(c)(d) | | | 38%- 147% | |||
| | | | | | Utilization | | | 90%- 100% | |||
| | | | | | Equity / interest-rate correlation | | | 20%- 40% | |||
| | | | | | NPA(g) | | | 0.01% - 1.40% | |||
Index Annuities including certain GMWB | | | 6,445 | | | Discounted cash flow | | | Lapse rate | | | 0.50% - 50.00% |
| | | | | | Dynamic lapse multiplier(c) | | | 20.00% - 186.00% | |||
| | | | | | Mortality multiplier(f) | | | 24.00% - 180.00% | |||
| | | | | | Utilization(h) | | | 60.00% - 95.00% | |||
| | | | | | Option Budget | | | 0% - 4.00% | |||
| | | | | | NPA(g) | | | 0.01% - 1.40% | |||
Index Life | | | 765 | | | Discounted cash flow | | | Base lapse rate | | | 0.00% - 37.97% |
| | | | | | Mortality rate | | | 0.002% - 100.00% | |||
| | | | | | NPA(g) | | | 0.01% - 1.40% |
(in millions) | | | Fair Value at December 31, 2020 | | | Valuation Technique | | | Unobservable Input(a) | | | Range (Weighted Average)(b) |
Assets: | | | | | | | | | ||||
Obligations of states, municipalities and political subdivisions | | | $1,621 | | | Discounted cash flow | | | Yield | | | 2.81% - 3.39% (3.10%) |
Corporate debt | | | 1,365 | | | Discounted cash flow | | | Yield | | | 2.03% - 6.39% (4.21%) |
RMBS(d) | | | 7,799 | | | Discounted cash flow | | | Constant prepayment rate | | | 3.94% - 11.86% (7.90%) |
| | | | | | Loss severity | | | 28.29% - 78.99% (53.64%) | |||
| | | | | | Constant default rate | | | 1.33% - 6.12% (3.72%) | |||
| | | | | | Yield | | | 1.72% - 4.39% (3.05%) | |||
CLO/ABS(d) | | | 7,962 | | | Discounted cash flow | | | Yield | | | 2.18% - 4.47% (3.33%) |
CMBS | | | 556 | | | Discounted cash flow | | | Yield | | | 1.45% - 7.61% (3.41%) |
Liabilities(e): | | | | | | | | | ||||
Embedded derivatives within Policyholder contract deposits | | | | | | | | | ||||
Variable annuity guaranteed minimum withdrawal benefits (GMWB) | | | 3,702 | | | Discounted cash flow | | | Equity volatility | | | 6.45% - 50.85% |
| | | | | | Base lapse rate | | | 0.16% - 12.60% | |||
| | | | | | Dynamic lapse multiplier(c) | | | 50.00% - 143.00% | |||
| | | | | | Mortality multiplier(c)(d) | | | 38.00% - 147.00% | |||
| | | | | | Utilization | | | 90.00% - 100.00% | |||
| | | | | | Equity / interest-rate correlation | | | 20.00% - 40.00% | |||
| | | | | | NPA(g) | | | 0.06% - 1.48% | |||
Index Annuities including certain GMWB | | | 5,631 | | | Discounted cash flow | | | Lapse rate | | | 0.38% - 50.00% |
| | | | | | Mortality multiplier(f) | | | 24.00% - 180.00% | |||
| | | | | | Utilization(h) | | | 80.00% - 100.00% | |||
| | | | | | Option budget | | | 0.00% - 4.00% | |||
| | | | | | NPA(g) | | | 0.06% - 1.48% | |||
Index Life | | | 649 | | | Discounted cash flow | | | Base lapse rate | | | 0.00% - 37.97% |
| | | | | | Mortality rate | | | 0.00% - 100.00% | |||
| | | | | | NPA(g) | | | 0.06% - 1.48% | |||
Guaranteed investment contract | | | 38 | | | Black Scholes | | | Equity volatility | | | 27.85% |
| | | | option pricing model | | | Borrowing cost | | | 0.44% | ||
| | | | | | Dividend yield | | | 1.58% | |||
Debt of consolidated investment entities | | | 947 | | | Discounted cash flow | | | Yield | | | 13.00% |
(a) | Represents discount rates, estimates and assumptions that we believe would be used by market participants when valuing these assets and liabilities. |
(b) | The weighted averaging for fixed maturity securities is based on the estimated fair value of the securities. Because the valuation methodology for embedded derivatives within Policyholder contract deposits uses a range of inputs that vary at the contract level over the cash flow projection period, management believes that presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation. |
(c) | The ranges for these inputs vary due to the different GMWB product specifications and policyholder characteristics across in force policies. Policyholder characteristics that affect these ranges include age, policy duration, and gender. |
(d) | Information received from third-party valuation service providers. The ranges of the unobservable inputs for constant prepayment rate, loss severity and constant default rate relate to each of the individual underlying mortgage loans that comprise the entire portfolio of securities in the RMBS and CLO securitization vehicles and not necessarily to the securitization vehicle bonds (tranches) purchased by us. The ranges of these inputs do not directly correlate to changes in the fair values of the tranches purchased by us, because there are other factors relevant to the fair values of specific tranches owned by us including, but not limited to, purchase price, position in the waterfall, senior versus subordinated position and attachment points. |
(e) | The Fortitude Re funds withheld payable has been excluded from the above table. As discussed in Note 7, the Fortitude Re funds withheld payable is created through modco and funds withheld reinsurance arrangements where the investments supporting the reinsurance agreements are withheld by and continue to reside on Corebridge’s balance sheet. This embedded derivative is valued as a total return swap with reference to the fair value of the invested assets held by Corebridge. Accordingly, the unobservable inputs utilized in the valuation of the embedded derivative are a component of the invested assets supporting the reinsurance agreements that are held on Corebridge’s balance sheet. |
(f) | Mortality inputs are shown as multipliers of the 2012 Individual Annuity Mortality Basic table. |
(g) | The non-performance risk adjustment (NPA) applied as a spread over risk-free curve for discounting. |
(h) | The partial withdrawal utilization unobservable input range shown applies only to policies with guaranteed minimum withdrawal benefit riders that are accounted for as an embedded derivative. The total embedded derivative liability related to these guarantees at December 31, 2021 is approximately $1.2 billion. The remaining guaranteed minimum riders on the Index Annuities are valued under the accounting guidance for certain nontraditional long-duration contracts. |
• | Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. Increases in assumed volatility will generally increase the fair value of both the projected cash flows from rider fees as well as the projected cash flows related to benefit payments. Therefore, the net change in the fair value of the liability may be either a decrease or an increase, depending on the relative changes in projected rider fees and projected benefit payments. |
• | Equity / interest rate correlation estimates the relationship between changes in equity returns and interest rates in the economic scenario generator used to value our GMWB embedded derivatives. In general, a higher positive correlation assumes that equity markets and interest rates move in a more correlated fashion, which generally increases the fair value of the liability. |
• | Base lapse rate assumptions are determined by company experience and judgment and are adjusted at the contract level using a dynamic lapse function, which reduces the base lapse rate when the contract is in-the-money (when the contract holder’s guaranteed value, as estimated by the company, is worth more than their underlying account value). Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. Increases in assumed lapse rates will generally decrease the fair value of the liability, as fewer policyholders would persist to collect guaranteed withdrawal amounts. |
• | Mortality rate assumptions, which vary by age and gender, are based on company experience and include a mortality improvement assumption. Increases in assumed mortality rates will decrease the fair value of the liability, while lower mortality rate assumptions will generally increase the fair value of the liability, because guaranteed payments will be made for a longer period of time. |
• | Utilization assumptions estimate the timing when policyholders with a GMWB will elect to utilize their benefit and begin taking withdrawals. The assumptions may vary by the type of guarantee, tax-qualified status, the contract’s withdrawal history and the age of the policyholder. Utilization assumptions are based on company experience, which includes partial withdrawal behavior. Increases in assumed utilization rates will generally increase the fair value of the liability. |
• | Option budget estimates the expected long-term cost of options used to hedge exposures associated with equity price changes. The level of option budgets determines future costs of the options, which impacts the growth in account value and the valuation of embedded derivatives. |
| | | | December 31, 2021 | | | December 31, 2020 | ||||||||
(in millions) | | | Investment Category Includes | | | Fair Value Using NAV Per Share (or its equivalent) | | | Unfunded Commitments | | | Fair Value Using NAV Per Share (or its equivalent) | | | Unfunded Commitments |
Investment Category | | | | | | | | | | | |||||
Private equity funds: | | | | | | | | | | | |||||
Leveraged buyout | | | Debt and/or equity investments made as part of a transaction in which assets of mature companies are acquired from the current shareholders, typically with the use of financial leverage | | | $1,762 | | | $1,229 | | | $1,118 | | | $1,403 |
Real Estate | | | Investments in real estate properties and infrastructure positions, including power plants and other energy generating facilities | | | 490 | | | 365 | | | 427 | | | 374 |
Venture capital | | | Early-stage, high-potential, growth companies expected to generate a return through an eventual realization event, such as an initial public offering or sale of the company | | | 194 | | | 135 | | | 140 | | | 128 |
Growth equity | | | Funds that make investments in established companies for the purpose of growing their businesses | | | 637 | | | 37 | | | 400 | | | 35 |
Mezzanine | | | Funds that make investments in the junior debt and equity securities of leveraged companies | | | 306 | | | 268 | | | 186 | | | 57 |
Other | | | Includes distressed funds that invest in securities of companies that are in default or under bankruptcy protection, as well as funds that have multi-strategy, and other strategies | | | 921 | | | 324 | | | 466 | | | 301 |
Total private equity funds | | | | | 4,310 | | | 2,358 | | | 2,737 | | | 2,298 | |
Hedge funds: | | | | | | | | | | | |||||
Event-driven | | | Securities of companies undergoing material structural changes, including mergers, acquisitions and other reorganizations | | | 18 | | | — | | | 22 | | | — |
Long-short | | | Securities that the manager believes are undervalued, with corresponding short positions to hedge market risk | | | 404 | | | — | | | 342 | | | — |
Macro | | | Investments that take long and short positions in financial instruments based on a top-down view of certain economic and capital market conditions | | | 370 | | | — | | | 286 | | | — |
Other | | | Includes investments held in funds that are less liquid, as well as other strategies which allow for broader allocation between public and private investments | | | 110 | | | — | | | 13 | | | — |
Total hedge funds | | | | | 902 | | | — | | | 663 | | | — | |
Total | | | | | $5,212 | | | $2,358 | | | $3,400 | | | $2,298 |
Years Ended December 31, (in millions) | | | Gain (Loss) | ||||||
| 2021 | | | 2020 | | | 2019 | ||
Assets: | | | | | | | |||
Other bond securities | | | $26 | | | $72 | | | $429 |
Alternative investments(a) | | | 1,083 | | | 290 | | | 233 |
Liabilities: | | | | | | | |||
Policyholder contract deposits(b) | | | 7 | | | (9) | | | (10) |
Debt of consolidated investment entities(c) | | | (179) | | | (102) | | | (143) |
Total gain | | | $937 | | | $251 | | | $509 |
(a) | Includes certain hedge funds, private equity funds and other investment partnerships. |
(b) | Represents GICs. |
(c) | Primarily related to six transactions securitizing certain debt portfolios previously owned by Corebridge and its affiliates. For additional information, see Note 9. |
| | Assets at Fair Value | | | Impairment Charges | ||||||||||||||||
| | Non-Recurring Basis | | | December 31, | ||||||||||||||||
(in millions) | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | | 2021 | | | 2020 | | | 2019 |
December 31, 2021 | | | | | | | | | | | | | | | |||||||
Other investments | | | $— | | | $— | | | $89 | | | $89 | | | $6 | | | $77 | | | $76 |
Mortgage and other loans receivable* | | | — | | | $— | | | $15 | | | $15 | | | $— | | | $— | | | $— |
Other assets | | | — | | | 14 | | | — | | | 14 | | | 1 | | | 5 | | | — |
Total | | | $— | | | $14 | | | $104 | | | $118 | | | $7 | | | $82 | | | $76 |
December 31, 2020 | | | | | | | | | | | | | | | |||||||
Other investments | | | $— | | | $— | | | $376 | | | $376 | | | | | | | |||
Mortgage and other loans receivable | | | — | | | — | | | — | | | — | | | | | | | |||
Other assets | | | — | | | 18 | | | — | | | 18 | | | | | | | |||
Total | | | $— | | | $18 | | | $376 | | | $394 | | | | | | |
* | Mortgage and other loans receivable are carried at lower of cost or fair value. |
• | Mortgage and other loans receivable: Fair values of loans on commercial real estate and other loans receivable are estimated for disclosure purposes using discounted cash flow calculations based on discount rates that we believe market participants would use in determining the price that they would pay for such assets. For certain loans, our current incremental lending rates for similar types of loans are used as the discount rates, because we believe this rate approximates the rates market participants |
• | Other invested assets: The majority of the Other invested assets that are not measured at fair value represent time deposits with the original maturity at purchase greater than one year. The fair value of long-term time deposits is determined using the expected discounted future cash flow. |
• | Cash and short-term investments: The carrying amounts of these assets approximate fair values because of the relatively short period of time between origination and expected realization, and their limited exposure to credit risk. |
• | Policyholder contract deposits associated with investment-type contracts: Fair values for policyholder contract deposits associated with investment-type contracts not accounted for at fair value are estimated using discounted cash flow calculations based on interest rates currently being offered for similar contracts with maturities consistent with those of the contracts being valued. When no similar contracts are being offered, the discount rate is the appropriate swap rate (if available) or current risk-free interest rate consistent with the currency in which the cash flows are denominated. To determine fair value, other factors include current policyholder account values and related surrender charges and other assumptions include expectations about policyholder behavior and an appropriate risk margin. |
• | Other liabilities: The majority of the Other liabilities that are financial instruments not measured at fair value represent secured financing arrangements, including repurchase agreements. The carrying amounts of these liabilities approximate fair value, because the financing arrangements are short-term and are secured by cash or other liquid collateral. |
• | Fortitude Re funds withheld payable: The funds withheld payable contains an embedded derivative and the changes in its fair value are recognized in earnings each period. The difference between the total Fortitude Re funds withheld payable and the embedded derivative represents the host contract. |
• | Short-term and long-term debt and debt of consolidated investment entities: Fair values of these obligations were determined by reference to quoted market prices, when available and appropriate, or discounted cash flow calculations based upon our current market observable implicit credit spread rates for similar types of borrowings with maturities consistent with those remaining for the debt being valued. |
• | Separate Account Liabilities—Investment Contracts: Only the portion of separate account liabilities related to products that are investment contracts are reflected in the table below. Separate account liabilities are recorded at the amount credited to the contract holder, which reflects the change in fair value of the corresponding separate account assets including contract holder deposits less withdrawals and fees; therefore, carrying value approximates fair value. |
| | Estimated Fair Value | | | Carrying Value | ||||||||||
(in millions) | | | Level 1 | | | Level 2 | | | Level 3 | | | Total | | ||
December 31, 2021 | | | | | | | | | | | |||||
Assets: | | | | | | | | | | | |||||
Mortgage and other loans receivable | | | $— | | | $52 | | | $41,077 | | | $41,129 | | | $39,373 |
Other invested assets | | | — | | | 193 | | | — | | | 193 | | | 193 |
Short-term investments | | | — | | | 4,016 | | | — | | | 4,016 | | | 4,016 |
Cash | | | 537 | | | — | | | — | | | 537 | | | 537 |
Other assets | | | 7 | | | — | | | — | | | 7 | | | 7 |
Liabilities: | | | | | | | | | | | |||||
Policyholder contract deposits associated | | | | | | | | | | | |||||
with investment-type contracts | | | — | | | 169 | | | 142,974 | | | 143,143 | | | 133,043 |
Fortitude Re funds withheld payable | | | — | | | — | | | 27,170 | | | 27,170 | | | 27,170 |
Other liabilities | | | — | | | 3,704 | | | — | | | 3,704 | | | 3,704 |
Short-term debt | | | — | | | — | | | 8,317 | | | 8,317 | | | 8,317 |
Long-term debt | | | — | | | 586 | | | — | | | 586 | | | 427 |
Debt of consolidated investment entities | | | — | | | 3,077 | | | 3,810 | | | 6,887 | | | 6,931 |
Separate account liabilities - investment contracts | | | — | | | 104,126 | | | — | | | 104,126 | | | 104,126 |
December 31, 2020 | | | | | | | | | | | |||||
Assets: | | | | | | | | | | | |||||
Mortgage and other loans receivable | | | $— | | | $60 | | | $40,966 | | | $41,026 | | | $38,314 |
Other invested assets | | | — | | | 174 | | | — | | | 174 | | | 174 |
Short-term investments | | | — | | | 5,384 | | | — | | | 5,384 | | | 5,384 |
Cash | | | 654 | | | — | | | — | | | 654 | | | 654 |
Other assets | | | 204 | | | 2 | | | — | | | 206 | | | 206 |
Liabilities: | | | | | | | | | | | |||||
Policyholder contract deposits associated | | | | | | | | | | | |||||
with investment-type contracts | | | — | | | 214 | | | 144,357 | | | 144,571 | | | 130,396 |
Fortitude Re funds withheld payable | | | — | | | — | | | 29,040 | | | 29,040 | | | 29,040 |
Other liabilities | | | — | | | 3,695 | | | — | | | 3,695 | | | 3,695 |
Short-term debt | | | — | | | — | | | — | | | — | | | — |
Long-term debt | | | — | | | 884 | | | 265 | | | 1,149 | | | 905 |
Debt of consolidated investment entities | | | — | | | 1,837 | | | 7,783 | | | 9,620 | | | 9,390 |
Separate account liabilities - investment contracts | | | — | | | 95,610 | | | — | | | 95,610 | | | 95,610 |
(in millions) | | | Amortized Cost or Cost(a) | | | Allowance for Credit Losses(b) | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value(a) |
December 31, 2021 | | | | | | | | | | | |||||
Bonds available for sale: | | | | | | | | | | | |||||
U.S. government and government sponsored entities | | | $1,406 | | | $— | | | $306 | | | $— | | | $1,712 |
Obligations of states, municipalities and political subdivisions | | | 7,321 | | | — | | | 1,362 | | | (7) | | | 8,676 |
Non-U.S. governments | | | 6,026 | | | — | | | 495 | | | (124) | | | 6,397 |
Corporate debt | | | 128,417 | | | (72) | | | 12,674 | | | (956) | | | 140,063 |
Mortgage-backed, asset-backed and collateralized: | | | | | | | | | | | |||||
RMBS | | | 13,236 | | | (6) | | | 1,762 | | | (34) | | | 14,958 |
CMBS | | | 10,903 | | | — | | | 451 | | | (54) | | | 11,300 |
CLO/ABS | | | 15,284 | | | — | | | 278 | | | (100) | | | 15,462 |
Total mortgage-backed, asset-backed and collateralized | | | 39,423 | | | (6) | | | 2,491 | | | (188) | | | 41,720 |
Total bonds available for sale(c) | | | $182,593 | | | $(78) | | | $17,328 | | | $(1,275) | | | $198,568 |
(in millions) | | | Amortized Cost or Cost(a) | | | Allowance for Credit Losses(b) | | | Gross Unrealized Gains | | | Gross Unrealized Losses | | | Fair Value(a) |
December 31, 2020 | | | | | | | | | | | |||||
Bonds available for sale: | | | | | | | | | | | |||||
U.S. government and government sponsored entities | | | $1,476 | | | $— | | | $425 | | | $(5) | | | $1,896 |
Obligations of states, municipalities and political subdivisions | | | 7,957 | | | — | | | 1,619 | | | (7) | | | 9,569 |
Non-U.S. governments | | | 4,973 | | | (2) | | | 797 | | | (30) | | | 5,738 |
Corporate debt | | | 120,067 | | | (116) | | | 17,897 | | | (434) | | | 137,414 |
Mortgage-backed, asset-backed and collateralized: | | | | | | | | | | | |||||
RMBS | | | 15,715 | | | (12) | | | 2,182 | | | (24) | | | 17,861 |
CMBS | | | 10,582 | | | (1) | | | 828 | | | (50) | | | 11,359 |
CLO/ABS | | | 13,792 | | | — | | | 406 | | | (94) | | | 14,104 |
Total mortgage-backed, asset-backed and collateralized | | | 40,089 | | | (13) | | | 3,416 | | | (168) | | | 43,324 |
Total bonds available for sale(c) | | | $174,562 | | | $(131) | | | $24,154 | | | $(644) | | | $197,941 |
(a) | The table above includes available for sale securities issued by related parties. This includes RMBS securities which had a fair value of $47 million and $49 million, and an amortized cost of $44 million and $45 million as of December 31, 2021 and 2020, respectively. Additionally, this includes CLO/ABS securities which had a fair value of $862 million and $1.0 billion and an amortized cost of $823 million and $977 million as of December 31, 2021 and 2020, respectively. |
(b) | Represents the allowance for credit losses that has been recognized. Changes in the allowance for credit losses are recorded in Net realized gains (losses) and are not recognized in other comprehensive income. |
(c) | At December 31, 2021 and 2020, bonds available for sale held by us that were below investment grade or not rated totaled $20.4 billion and $21.1 billion, respectively. |
| | Less than 12 Months | | | 12 Months or More | | | Total | ||||||||||
(in millions) | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses |
December 31, 2021 | | | | | | | | | | | | | ||||||
Bonds available for sale: | | | | | | | | | | | | | ||||||
U.S. government and government sponsored entities | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— |
Obligations of states, municipalities and political subdivisions | | | 201 | | | 4 | | | 48 | | | 3 | | | 249 | | | 7 |
Non-U.S. governments | | | 1,198 | | | 58 | | | 376 | | | 66 | | | 1,574 | | | 124 |
Corporate debt | | | 19,916 | | | 513 | | | 6,922 | | | 387 | | | 26,838 | | | 900 |
RMBS | | | 1,235 | | | 30 | | | 27 | | | 2 | | | 1,262 | | | 32 |
CMBS | | | 2,498 | | | 36 | | | 79 | | | 18 | | | 2,577 | | | 54 |
CLO/ABS | | | 6,369 | | | 91 | | | 161 | | | 9 | | | 6,530 | | | 100 |
Total bonds available for sale | | | $31,417 | | | $732 | | | $7,613 | | | $485 | | | $39,030 | | | $1,217 |
| | Less than 12 Months | | | 12 Months or More | | | Total | ||||||||||
(in millions) | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses | | | Fair Value | | | Gross Unrealized Losses |
December 31, 2020 | | | | | | | | | | | | | ||||||
Bonds available for sale: | | | | | | | | | | | | | ||||||
U.S. government and government sponsored entities | | | $49 | | | $5 | | | $— | | | $— | | | $49 | | | $5 |
Obligations of states, municipalities and political subdivisions | | | 234 | | | 4 | | | 78 | | | 3 | | | 312 | | | 7 |
Non-U.S. governments | | | 78 | | | 2 | | | 118 | | | 26 | | | 196 | | | 28 |
Corporate debt | | | 8,455 | | | 275 | | | 1,001 | | | 72 | | | 9,456 | | | 347 |
RMBS | | | 417 | | | 7 | | | 94 | | | 8 | | | 511 | | | 15 |
CMBS | | | 873 | | | 36 | | | 233 | | | 13 | | | 1,106 | | | 49 |
CLO/ABS | | | 3,998 | | | 57 | | | 2,021 | | | 37 | | | 6,019 | | | 94 |
Total bonds available for sale | | | $14,104 | | | $386 | | | $3,545 | | | $159 | | | $17,649 | | | $545 |
| | Total Fixed Maturity Securities Available for Sale | ||||
(in millions) | | | Amortized Cost, Net of Allowance | | | Fair Value |
December 31, 2021 | | | | | ||
Due in one year or less | | | $2,959 | | | $2,982 |
Due after one year through five years | | | 20,430 | | | 21,298 |
Due after five years through ten years | | | 30,966 | | | 33,118 |
Due after ten years | | | 88,743 | | | 99,450 |
Mortgage-backed, asset-backed and collateralized | | | 39,417 | | | 41,720 |
Total | | | $182,515 | | | $198,568 |
| | Years Ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
(in millions) | | | Gross Realized Gains | | | Gross Realized Losses | | | Gross Realized Gains | | | Gross Realized Losses | | | Gross Realized Gains | | | Gross Realized Losses |
Fixed maturity securities | | | $894 | | | $(144) | | | $1,022 | | | $440 | | | $429 | | | $204 |
| | December 31, 2021 | | | December 31, 2020 | |||||||
(in millions) | | | Fair Value | | | Percent of Total | | | Fair Value | | | Percent of Total |
Fixed maturity securities: | | | | | | | | | ||||
Obligations of states, municipalities, and political subdivisions | | | $50 | | | 2% | | | $— | | | —% |
Non-U.S. governments | | | 17 | | | 1 | | | — | | | — |
Corporate debt | | | 1,000 | | | 43 | | | — | | | — |
Mortgage-backed, asset-backed and collateralized: | | | | | | | | | ||||
RMBS | | | 199 | | | 9 | | | 203 | | | 14 |
CMBS | | | 234 | | | 10 | | | 218 | | | 16 |
CLO/ABS and other collateralized | | | 582 | | | 25 | | | 359 | | | 26 |
Total mortgage-backed, asset-backed and collateralized | | | 1,015 | | | 44 | | | 780 | | | 56 |
Total fixed maturity securities | | | 2,082 | | | 90 | | | 780 | | | 56 |
Equity securities(a) | | | 242 | | | 10 | | | 609 | | | 44 |
Total | | | $2,324 | | | 100% | | | $1,389 | | | 100% |
(a) | The table above includes other securities measured at fair value issued by related parties, which are primarily Corebridge affiliates that are not consolidated. This includes equity securities which had a fair value of $31 million as of December 31, 2020. There were no equity securities with related parties as of December 31, 2021. |
(in millions) | | | December 31, 2021 | | | December 31, 2020 |
Alternative investments(a)(b) | | | $7,527 | | | $6,107 |
Investment real estate(c) | | | 2,349 | | | 6,908 |
All other investments(d) | | | 691 | | | 380 |
Total(e) | | | $10,567 | | | $13,395 |
(a) | At December 31, 2021, included hedge funds of $1.0 billion, and private equity funds of $6.5 billion. At December 31, 2020, included hedge funds of $0.8 billion, private equity funds of $5.0 billion, and affordable housing partnerships of $257 million. |
(b) | At December 31, 2021, approximately 73% of our hedge fund portfolio is available for redemption in 2022. The remaining 27% will be available for redemption between 2023 and 2028. |
(c) | Net of accumulated depreciation of $493 million and $555 million in 2021 and 2020, respectively, excluding affordable housing partnerships. The accumulated depreciation related to the investment real estate held by affordable housing partnerships is $123 million and $595 million in 2021 and 2020, respectively. |
(d) | Includes Corebridge’s 3.5% ownership interest in Fortitude Holdings which is recorded using the measurement alternative for equity interest and is carried at cost, which was $100 million as of December 31, 2021. |
(e) | Includes investments in related parties, which totaled $11 million and $45 million as of December 31, 2021 and December 31, 2020, respectively. |
Years Ended December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Operating results: | | | | | | | |||
Total revenues | | | $9,425 | | | $2,375 | | | $1,363 |
Total expenses | | | (674) | | | (778) | | | (867) |
Net income | | | $8,751 | | | $1,597 | | | $496 |
At December 31, (in millions) | | | | | 2021 | | | 2020 | |
Balance sheet: | | | | | | | |||
Total assets | | | | | $33,894 | | | $25,886 | |
Total liabilities | | | | | $(4,453) | | | $(3,224) |
| | 2021 | | | 2020 | |||||||
(in millions) | | | Carrying Value | | | Ownership Percentage | | | Carrying Value | | | Ownership Percentage |
Equity method investments | | | $2,797 | | | Various | | | $2,385 | | | Various |
• | Interest income and related expenses, including amortization of premiums and accretion of discounts with changes in the timing and the amount of expected principal and interest cash flows reflected in yield, as applicable. |
• | Dividend income from common and preferred stocks. |
• | Realized and unrealized gains and losses from investments in other securities and investments for which we elected the fair value option. |
• | Earnings from alternative investments. |
• | Prepayment premiums. |
Years Ended December 31, | | | 2021 | | | 2020 | | | 2019 | ||||||||||||||||||
(in millions) | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total |
Available for sale fixed maturity securities, including short-term investments | | | $6,837 | | | $1,296 | | | $8,133 | | | $6,841 | | | $1,279 | | | $8,120 | | | $6,820 | | | $1,330 | | | $8,150 |
Other fixed maturity securities | | | 17 | | | 9 | | | 26 | | | 66 | | | 6 | | | 72 | | | 417 | | | 12 | | | 429 |
Equity securities | | | (290) | | | — | | | (290) | | | 255 | | | — | | | 255 | | | 65 | | | — | | | 65 |
Interest on mortgage and other loans | | | 1,479 | | | 184 | | | 1,663 | | | 1,489 | | | 166 | | | 1,655 | | | 1,486 | | | 156 | | | 1,642 |
Alternative investments(a) | | | 1,851 | | | 318 | | | 2,169 | | | 584 | | | 12 | | | 596 | | | 449 | | | 139 | | | 588 |
Real estate | | | 204 | | | — | | | 204 | | | 177 | | | — | | | 177 | | | 235 | | | — | | | 235 |
Other investments | | | 115 | | | — | | | 115 | | | 13 | | | — | | | 13 | | | 50 | | | — | | | 50 |
Total investment income | | | 10,213 | | | 1,807 | | | 12,020 | | | 9,425 | | | 1,463 | | | 10,888 | | | 9,522 | | | 1,637 | | | 11,159 |
Investment expenses | | | 316 | | | 32 | | | 348 | | | 336 | | | 36 | | | 372 | | | 346 | | | 39 | | | 385 |
Net investment income | | | $9,897 | | | $1,775 | | | $11,672 | | | $9,089 | | | $1,427 | | | $10,516 | | | $9,176 | | | $1,598 | | | $10,774 |
(a) | Included income from hedge funds, private equity funds and affordable housing partnerships. Hedge funds are recorded as of the balance sheet date. Private equity funds are generally reported on a one-quarter lag. |
• | Sales or full redemptions of available for sale fixed maturity securities, real estate and other alternative investments. |
• | Reductions to the amortized cost basis of available for sale fixed maturity securities that have been written down due to our intent to sell them or it being more likely than not that we will be required to sell them. |
• | Changes in the allowance for credit losses on bonds available for sale, mortgage and other loans receivable, and loans commitments. |
• | Changes in fair value of free standing and embedded derivatives, including changes in the non-performance adjustment, except for those instruments that are designated as hedging instruments when the change in the fair value of the hedged item is not reported in Net realized gains (losses). |
• | Foreign exchange gains and losses resulting from foreign currency transactions. |
• | Changes in fair value of the embedded derivative related to the Fortitude Re funds withheld assets. |
Years Ended December 31, | | | 2021 | | | 2020 | | | 2019 | ||||||||||||||||||
(in millions) | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total | | | Excluding Fortitude Re Funds Withheld Assets | | | Fortitude Re Funds Withheld Assets | | | Total |
Sales of fixed maturity securities | | | $103 | | | $647 | | | $750 | | | $(78) | | | $660 | | | $582 | | | $16 | | | $209 | | | $225 |
Other-than-temporary impairments | | | — | | | — | | | — | | | — | | | — | | | — | | | (119) | | | — | | | (119) |
Change in allowance for credit losses on fixed maturity securities | | | 8 | | | 3 | | | 11 | | | (186) | | | 17 | | | (169) | | | — | | | — | | | — |
Change in allowance for credit losses on loans | | | 133 | | | 8 | | | 141 | | | (61) | | | 3 | | | (58) | | | (28) | | | (13) | | | (41) |
Foreign exchange transactions, net of related hedges | | | 305 | | | 20 | | | 325 | | | 89 | | | (5) | | | 84 | | | 264 | | | 10 | | | 274 |
Variable annuity embedded derivatives, net of related hedges(a) | | | 94 | | | — | | | 94 | | | 162 | | | — | | | 162 | | | (333) | | | — | | | (333) |
Index annuity and indexed life embedded derivatives, net of related hedges | | | 11 | | | — | | | 11 | | | (766) | | | — | | | (766) | | | (348) | | | — | | | (348) |
All other derivatives and hedge accounting | | | (6) | | | 9 | | | 3 | | | (97) | | | 423 | | | 326 | | | (44) | | | 99 | | | 55 |
Other(b) | | | 970 | | | 237 | | | 1,207 | | | 172 | | | (96) | | | 76 | | | 433 | | | (43) | | | 390 |
Net realized gains (losses) – excluding Fortitude Re funds withheld embedded derivative | | | 1,618 | | | 924 | | | 2,542 | | | (765) | | | 1,002 | | | 237 | | | (159) | | | 262 | | | 103 |
Net realized gains (losses) on Fortitude Re funds withheld embedded derivative | | | — | | | (687) | | | (687) | | | — | | | (3,978) | | | (3,978) | | | — | | | (5,167) | | | (5,167) |
Net realized gains (losses) | | | $1,618 | | | $237 | | | $1,855 | | | $(765) | | | $(2,976) | | | $(3,741) | | | $(159) | | | $(4,905) | | | $(5,064) |
(a) | The 2020 and 2019 changes in Variable annuity embedded derivatives, net of related hedges was revised from $89 million and $(340) million to $162 million and $(333) million, respectively. The 2020 and 2019 Index annuity and Index life embedded derivatives, net of related hedges was revised from $(695) million and $(340) million to $(762) million and $(348) million, respectively. The 2020 and 2019 All other derivatives and hedge accounting excluding Fortitude Re funds withheld assets were revised from $95 million and $(45) million to $97 million and $(44) million, respectively. These revisions have no impact on Corebridge’s consolidated financial statements and are not considered material to the previously issued financial statements. |
(b) | In 2021, primarily includes gains from the sale of global real estate investments of $969 million, and gains from the sale of certain affordable housing partnerships of $208 million. In 2019, includes $300 million as a result of sales in investment real estate properties. |
| | Years Ended December 31, | ||||
(in millions) | | | 2021 | | | 2020 |
Increase (decrease) in unrealized appreciation (depreciation) of investments: | | | | | ||
Fixed maturity securities | | | $(7,457) | | | $8,895 |
Total increase (decrease) in unrealized appreciation (depreciation) of investments | | | $(7,457) | | | $8,895 |
Years Ended December 31, | | | 2021 | | | 2020 | ||||||||||||
(in millions) | | | Equities | | | Other Invested Assets | | | Total | | | Equities | | | Other Invested Assets | | | Total |
Net gains and losses recognized during the year on equity securities | | | $(290) | | | $1,362 | | | $1,072 | | | $255 | | | $375 | | | $630 |
Less: Net gains and losses recognized during the year on equity securities sold during the year | | | (255) | | | 30 | | | (225) | | | (36) | | | 54 | | | 18 |
Unrealized gains and losses recognized during the reporting period on equity securities still held at the reporting date | | | $(35) | | | $1,332 | | | $1,297 | | | $291 | | | $321 | | | $612 |
• | Current delinquency rates; |
• | Expected default rates and the timing of such defaults; |
• | Loss severity and the timing of any recovery; and |
• | Expected prepayment speeds. |
• | Expected default rates and the timing of such defaults; |
• | Loss severity and the timing of any recovery; and |
• | Scenarios specific to the issuer and the security, which may also include estimates of outcomes of corporate restructurings, political and macroeconomic factors, stability and financial strength of the issuer, the value of any secondary sources of repayment and the disposition of assets. |
Year Ended December 31, | | | 2021 | | | 2020 | ||||||||||||
(in millions) | | | Structured | | | Non- Structured | | | Total | | | Structured | | | Non- Structured | | | Total |
Balance, beginning of year* | | | $14 | | | $117 | | | $131 | | | $5 | | | $— | | | $5 |
Additions: | | | | | | | | | | | | | ||||||
Securities for which allowance for credit losses were not previously recorded | | | 3 | | | 46 | | | 49 | | | 28 | | | 211 | | | 239 |
Purchases of available for sale debt securities accounted for as purchased credit deteriorated assets | | | — | | | — | | | — | | | 25 | | | — | | | 25 |
Accretion of available for sale debt securities accounted for as purchased credit deteriorated assets | | | — | | | — | | | — | | | 1 | | | — | | | 1 |
Reductions: | | | | | | | | | | | | | ||||||
Securities sold during the period | | | (4) | | | (19) | | | (23) | | | (3) | | | (21) | | | (24) |
Intent to sell security or more likely than not will be required to sell the security before recovery of amortized cost basis | | | — | | | — | | | — | | | — | | | — | | | — |
Additional net increases or decreases to the allowance for credit losses on securities that had an allowance recorded in a previous period, for which there was no intent to sell before recovery amortized cost basis | | | (5) | | | (55) | | | (60) | | | (42) | | | (4) | | | (46) |
Write-offs charged against the allowance | | | — | | | (19) | | | (19) | | | — | | | (69) | | | (69) |
Recoveries of amounts previously written off | | | — | | | — | | | — | | | — | | | — | | | — |
Other | | | — | | | — | | | — | | | — | | | — | | | — |
Balance, end of year | | | $8 | | | $70 | | | $78 | | | $14 | | | $117 | | | $131 |
* | The beginning balance incorporates the Day 1 gross up on PCD assets held as of January 1, 2020. |
• | Current delinquency rates; |
• | Expected default rates and the timing of such defaults; |
• | Loss severity and the timing of any recovery; and |
• | Expected prepayment speeds. |
Year Ended December 31, (in millions) | | | 2021 | | | 2020 |
Unpaid principal balance | | | $— | | | $607 |
Allowance for expected credit losses at acquisition | | | — | | | (25) |
Purchase (discount) premium | | | — | | | (139) |
Purchase price | | | $— | | | $443 |
(in millions) | | | December 31, 2021 | | | December 31, 2020 |
Fixed maturity securities available for sale | | | $3,582 | | | $3,636 |
| | Remaining Contractual Maturity of the Agreements | ||||||||||||||||
(in millions) | | | Overnight and Continuous | | | up to 30 days | | | 31 - 90 days | | | 91 - 364 days | | | 365 days or greater | | | Total |
December 31, 2021 | | | | | | | | | | | | | ||||||
Bonds available for sale: | | | | | | | | | | | | | ||||||
Non-U.S. governments | | | $48 | | | $— | | | $— | | | $— | | | $— | | | $48 |
Corporate debt | | | 128 | | | 61 | | | 22 | | | — | | | — | | | 211 |
Total | | | $176 | | | $61 | | | $22 | | | $— | | | $— | | | $259 |
December 31, 2020 | | | | | | | | | | | | | ||||||
Bonds available for sale: | | | | | | | | | | | | | ||||||
Non-U.S. governments | | | $63 | | | $— | | | $— | | | $— | | | $— | | | $63 |
Corporate debt | | | 96 | | | 97 | | | — | | | — | | | — | | | 193 |
Total | | | $159 | | | $97 | | | $— | | | $— | | | $— | | | $256 |
| | Remaining Contractual Maturity of the Agreements | ||||||||||||||||
(in millions) | | | Overnight and Continuous | | | up to 30 days | | | 31 - 90 days | | | 91 - 364 days | | | 365 days or greater | | | Total |
December 31, 2021 | | | | | | | | | | | | | ||||||
Bonds available for sale: | | | | | | | | | | | | | ||||||
Obligations of states, municipalities and political subdivisions | | | $— | | | $— | | | $106 | | | $— | | | $— | | | $106 |
Corporate debt | | | — | | | 534 | | | 2,640 | | | — | | | — | | | 3,174 |
Non-U.S. government | | | — | | | — | | | 43 | | | — | | | — | | | 43 |
Total | | | $— | | | $534 | | | $2,789 | | | $— | | | $— | | | $3,323 |
December 31, 2020 | | | | | | | | | | | | | ||||||
Bonds available for sale: | | | | | | | | | | | | | ||||||
Obligations of states, municipalities and political subdivisions | | | $— | | | $— | | | $103 | | | $— | | | $— | | | $103 |
Corporate debt | | | — | | | 982 | | | 2,295 | | | — | | | — | | | 3,277 |
Non-U.S. government | | | — | | | — | | | — | | | — | | | — | | | — |
Total | | | $— | | | $982 | | | $2,398 | | | $— | | | $— | | | $3,380 |
(in millions) | | | December 31, 2021 | | | December 31, 2020 |
Commercial mortgages(a) | | | $30,528 | | | $31,030 |
Residential mortgages | | | 4,672 | | | 3,587 |
Life insurance policy loans | | | 1,832 | | | 1,972 |
Commercial loans, other loans and notes receivable(b) | | | 2,852 | | | 2,382 |
Total mortgage and other loans receivable | | | 39,884 | | | 38,971 |
Allowance for credit losses(c) | | | (496) | | | (657) |
Mortgage and other loans receivable, net | | | $39,388 | | | $38,314 |
(a) | Commercial mortgages primarily represent loans for multifamily apartments, offices and retail properties, with exposures in New York and California representing the largest geographic concentrations (aggregating approximately 22% and 10%, respectively, at December 31, 2021, and 25% and 10%, respectively, at December 31, 2020). The weighted average loan-to-value ratio for NY and CA was 51% and 53% at December 31, 2021, respectively and 47% and 47% at December 31, 2020, respectively. The debt service coverage ratio for NY and CA was 2.0X and 1.9X at December 31, 2021, respectively, and 1.6X and 1.9X at December 31, 2020, respectively. |
(b) | Includes loans held for sale which are carried at lower of cost or fair value (LCOM) and are collateralized primarily by hotels. As of December 31, 2021, the net carrying value of these loans was $15 million. |
(c) | Does not include allowance for credit losses of $57 million and $57 million at December 31, 2021 and 2020 in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities. |
December 31, 2021 (in millions) | | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | Prior | | | Total |
>1.2X | | | $1,861 | | | $1,520 | | | $4,915 | | | $3,300 | | | $2,997 | | | $9,005 | | | $23,598 |
1.00 - 1.20X | | | 463 | | | 810 | | | 598 | | | 1,030 | | | 88 | | | 1,684 | | | 4,673 |
<1.00X | | | — | | | 27 | | | 71 | | | 826 | | | — | | | 1,333 | | | 2,257 |
Total commercial mortgages | | | $2,324 | | | $2,357 | | | $5,584 | | | $5,156 | | | $3,085 | | | $12,022 | | | $30,528 |
December 31, 2020 (in millions) | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | Prior | | | Total |
>1.2X | | | $1,766 | | | $5,328 | | | $4,694 | | | $3,185 | | | $3,649 | | | $9,139 | | | $27,761 |
1.00 - 1.20X | | | 645 | | | 416 | | | 355 | | | 144 | | | 113 | | | 780 | | | 2,453 |
<1.00X | | | 2 | | | 72 | | | 343 | | | 87 | | | 79 | | | 233 | | | 816 |
Total commercial mortgages | | | $2,413 | | | $5,816 | | | $5,392 | | | $3,416 | | | $3,841 | | | $10,152 | | | $31,030 |
December 31, 2021 (in millions) | | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | Prior | | | Total |
Less than 65% | | | $1,859 | | | $1,935 | | | $3,912 | | | $4,072 | | | $2,384 | | | $8,264 | | | $22,426 |
65% to 75% | | | 304 | | | 396 | | | 1,672 | | | 1,084 | | | 340 | | | 2,814 | | | 6,610 |
76% to 80% | | | — | | | — | | | — | | | — | | | 188 | | | 259 | | | 447 |
Greater than 80% | | | 161 | | | 26 | | | — | | | — | | | 173 | | | 685 | | | 1,045 |
Total commercial mortgages | | | $2,324 | | | $2,357 | | | $5,584 | | | $5,156 | | | $3,085 | | | $12,022 | | | $30,528 |
December 31, 2020 (in millions) | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | Prior | | | Total |
Less than 65% | | | $2,117 | | | $3,580 | | | $3,360 | | | $1,967 | | | $2,305 | | | $6,805 | | | $20,134 |
65% to 75% | | | 266 | | | 2,187 | | | 1,801 | | | 1,203 | | | 832 | | | 2,228 | | | 8,517 |
76% to 80% | | | 28 | | | 30 | | | 31 | | | — | | | 59 | | | 396 | | | 544 |
Greater than 80% | | | 2 | | | 19 | | | 200 | | | 246 | | | 645 | | | 723 | | | 1,835 |
Total commercial mortgages | | | $2,413 | | | $5,816 | | | $5,392 | | | $3,416 | | | $3,841 | | | $10,152 | | | $31,030 |
(a) | The debt service coverage ratio compares a property’s net operating income to its debt service payments, including principal and interest. Our weighted average debt service coverage ratio was 1.9X and 2.2X at December 31, 2021 and 2020, respectively. The debt service coverage ratios have been updated within the last three months. |
(b) | The loan-to-value ratio compares the current unpaid principal balance of the loan to the estimated fair value of the underlying property collateralizing the loan. Our weighted average loan-to-value ratio was 57% and 60% at December 31, 2021 and 2020, respectively. The loan-to-value ratios have been updated within the last three to nine months. |
| | Number of Loans | | | Class | | | Percent of Total $ | |||||||||||||||||||
(dollars in millions) | | | Apartments | | | Offices | | | Retail | | | Industrial | | | Hotel | | | Others | | | Total(c) | | |||||
December 31, 2021 | | | | | | | | | | | | | | | | | | | |||||||||
Credit Quality Performance | | | | | | | | | | | | | | | | | | | |||||||||
Indicator: | | | | | | | | | | | | | | | | | | | |||||||||
In good standing | | | 613 | | | $12,394 | | | $8,370 | | | $4,026 | | | $3,262 | | | $1,726 | | | $301 | | | $30,079 | | | 99% |
Restructured(a) | | | 7 | | | — | | | 269 | | | 17 | | | — | | | 104 | | | — | | | 390 | | | 1 |
90 days or less delinquent | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
>90 days delinquent or in process of foreclosure | | | 4 | | | — | | | 59 | | | — | | | — | | | — | | | — | | | 59 | | | — |
Total(b) | | | 624 | | | $12,394 | | | $8,698 | | | $4,043 | | | $3,262 | | | $1,830 | | | $301 | | | $30,528 | | | 100% |
Allowance for credit losses | | | | | $93 | | | $193 | | | $69 | | | $39 | | | $23 | | | $6 | | | $423 | | | 1% | |
December 31, 2020 | | | | | | | | | | | | | | | | | | | |||||||||
Credit Quality Performance | | | | | | | | | | | | | | | | | | | |||||||||
Indicator: | | | | | | | | | | | | | | | | | | | |||||||||
In good standing | | | 661 | | | $12,134 | | | $9,000 | | | $4,324 | | | $3,096 | | | $1,805 | | | $328 | | | $30,687 | | | 99% |
Restructured(a) | | | 5 | | | — | | | 34 | | | 41 | | | — | | | 2 | | | — | | | 77 | | | — |
90 days or less delinquent | | | 3 | | | — | | | 87 | | | — | | | — | | | 76 | | | — | | | 163 | | | 1 |
>90 days delinquent or in process of foreclosure | | | 3 | | | — | | | 45 | | | — | | | — | | | 58 | | | — | | | 103 | | | — |
Total(b) | | | 672 | | | $12,134 | | | $9,166 | | | $4,365 | | | $3,096 | | | $1,941 | | | $328 | | | $31,030 | | | 100% |
Total allowance for credit losses | | | — | | | $122 | | | $212 | | | $113 | | | $42 | | | $49 | | | $8 | | | $546 | | | 2% |
(a) | Loans that have been modified in troubled debt restructurings and are performing according to their restructured terms. For additional discussion of troubled debt restructurings see below. |
(b) | Does not reflect allowance for credit losses. |
(c) | Our commercial mortgage loan portfolio is current as to payments of principal and interest, for both periods presented. There were no significant amounts of nonperforming commercial mortgages (defined as those loans where payment of contractual principal or interest is more than 90 days past due) during any of the periods presented. |
December 31, 2021 (in millions) | | | 2021 | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | Prior | | | Total |
FICO*: | | | | | | | | | | | | | | | |||||||
780 and greater | | | $1,398 | | | $678 | | | $284 | | | $100 | | | $107 | | | $325 | | | $2,892 |
720 - 779 | | | 1,118 | | | 225 | | | 83 | | | 41 | | | 36 | | | 94 | | | 1,597 |
660 - 719 | | | 44 | | | 39 | | | 20 | | | 11 | | | 13 | | | 33 | | | 160 |
600 - 659 | | | 1 | | | 1 | | | 2 | | | 3 | | | 2 | | | 6 | | | 15 |
Less than 600 | | | — | | | — | | | — | | | 1 | | | 1 | | | 6 | | | 8 |
Total residential mortgages | | | $2,561 | | | $943 | | | $389 | | | $156 | | | $159 | | | $464 | | | $4,672 |
December 31, 2020 (in millions) | | | 2020 | | | 2019 | | | 2018 | | | 2017 | | | 2016 | | | Prior | | | Total |
FICO*: | | | | | | | | | | | | | | | |||||||
780 and greater | | | $418 | | | $605 | | | $266 | | | $261 | | | $407 | | | $258 | | | $2,215 |
720 - 779 | | | 396 | | | 333 | | | 99 | | | 101 | | | 133 | | | 80 | | | 1,142 |
660 - 719 | | | 15 | | | 59 | | | 27 | | | 27 | | | 38 | | | 30 | | | 196 |
600 - 659 | | | 1 | | | 5 | | | 6 | | | 4 | | | 3 | | | 6 | | | 25 |
Less than 600 | | | — | | | — | | | 1 | | | 1 | | | 2 | | | 5 | | | 9 |
Total residential mortgages | | | $830 | | | $1,002 | | | $399 | | | $394 | | | $583 | | | $379 | | | $3,587 |
* | Fair Isaac Corporation (FICO) is the credit quality indicator used to evaluate consumer credit risk for residential mortgage loan borrowers and have been updated within the last three months. |
Years Ended December 31, | | | 2021 | | | 2020 | | | 2019 | ||||||||||||||||||
(in millions) | | | Commercial Mortgages | | | Other Loans | | | Total | | | Commercial Mortgages | | | Other Loans | | | Total | | | Commercial Mortgages | | | Other Loans | | | Total |
Allowance, beginning of year | | | $546 | | | $111 | | | $657 | | | $266 | | | $91 | | | $357 | | | $249 | | | $74 | | | $323 |
Initial allowance upon CECL adoption | | | — | | | — | | | — | | | 272 | | | 2 | | | 274 | | | — | | | — | | | — |
Loans charged off | | | (1) | | | — | | | (1) | | | (12) | | | (5) | | | (17) | | | (2) | | | (3) | | | (5) |
Recoveries of loans previously charged off | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Net charge-offs | | | (1) | | | — | | | (1) | | | (12) | | | (5) | | | (17) | | | (2) | | | (3) | | | (5) |
Addition to (release of) allowance | | | (122) | | | (19) | | | (141) | | | 20 | | | 23 | | | 43 | | | 19 | | | 20 | | | 39 |
Divestitures | | | — | | | (19) | | | (19) | | | — | | | — | | | — | | | — | | | — | | | — |
Allowance, end of year(b) | | | $423 | | | $73 | | | $496 | | | $546 | | | $111 | | | $657 | | | $266 | | | $91 | | | $357 |
(a) | Does not include allowance for credit losses of $57 million and $57 million at December 31, 2021 and 2020 in relation to off-balance-sheet commitments to fund commercial mortgage loans, which is recorded in Other liabilities. |
(b) | The December 31, 2019 total allowance was calculated prior to the adoption of Financial Instruments Credit Losses Standard on January 1, 2020. Of the total allowance, $10 million relates to individually assessed credit losses on $135 million of commercial mortgages at December 31, 2019. |
At December 31, (in millions) | | | 2021 | | | 2020 |
Assets | | | | | ||
Reinsurance assets, net of allowance | | | $2,932 | | | $2,707 |
Reinsurance assets - Fortitude Re, net of allowance | | | 28,472 | | | 29,158 |
Total Assets | | | $31,404 | | | $31,865 |
At December 31, (in millions) | | | 2021 | | | 2020 |
Liabilities | | | | | ||
Future policy benefits for life and accident and health insurance contracts | | | $57,751 | | | $54,660 |
Policyholder contract deposits | | | 156,846 | | | 154,892 |
Other policyholder funds | | | 2,849 | | | 2,492 |
Total Liabilities | | | $217,446 | | | $212,044 |
Years Ended December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Premiums | | | | | | | |||
Direct | | | $4,604 | | | $4,384 | | | $4,370 |
Assumed(a) | | | 2,265 | | | 1,073 | | | 232 |
Ceded | | | (1,232) | | | (1,116) | | | (1,101) |
Net | | | $5,637 | | | $4,341 | | | $3,501 |
Policy Fees | | | | | | | |||
Direct | | | $3,131 | | | $2,957 | | | $3,024 |
Assumed | | | — | | | — | | | — |
Ceded | | | (80) | | | (83) | | | (94) |
Net | | | $3,051 | | | $2,874 | | | $2,930 |
Policyholder benefits | | | | | | | |||
Direct | | | $10,583 | | | $9,092 | | | $7,907 |
Assumed | | | 78 | | | 32 | | | 1 |
Ceded | | | (2,611) | | | (2,522) | | | (2,573) |
Net | | | $8,050 | | | $6,602 | | | $5,335 |
(a) | Assumed premiums includes premium from pension risk transfer agreements of $2.3 billion, $1.1 billion, and $214 million for the years ended December 31, 2021, 2020 and 2019, respectively. |
At December 31, | | | 2021 | | | 2020 | | | |||||||
(in millions) | | | Carrying Value | | | Fair Value | | | Carrying Value | | | Fair Value | | | Corresponding Accounting Policy |
Fixed maturity securities - available for sale | | | $27,180 | | | $27,180 | | | $30,500 | | | $30,500 | | | Fair value through other comprehensive income |
Fixed maturity securities - fair value option | | | 1,593 | | | 1,593 | | | 121 | | | 121 | | | Fair value through net investment income |
Commercial mortgage loans | | | 3,179 | | | 3,383 | | | 3,191 | | | 3,490 | | | Amortized cost |
Real estate investments | | | 201 | | | 395 | | | 358 | | | 585 | | | Amortized cost |
Private equity funds / hedge funds | | | 1,606 | | | 1,606 | | | 1,168 | | | 1,168 | | | Fair value through net investment income |
Policy loans | | | 380 | | | 380 | | | 413 | | | 413 | | | Amortized cost |
Short-term Investments | | | 50 | | | 50 | | | 34 | | | 34 | | | Fair value through net investment income |
Funds withheld investment assets | | | 34,189 | | | 34,587 | | | 35,785 | | | 36,311 | | | |
Derivative assets, net(a) | | | 81 | | | 81 | | | — | | | — | | | Fair value through realized gains (losses) |
Other(b) | | | 476 | | | 476 | | | 478 | | | 478 | | | Amortized cost |
Total | | | $34,746 | | | $35,144 | | | $36,263 | | | $36,789 | | |
(a) | The derivative assets have been presented net of cash collateral. The derivative assets supporting the Fortitude Re funds withheld arrangements had a fair market value of $387 million and $361 million for the years ended December 31, 2021, 2020; respectively. These derivative assets are fully collateralized either by cash or securities. |
(b) | Primarily comprised of Cash and Accrued investment income. |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Net investment income - Fortitude Re funds withheld assets | | | $1,775 | | | $1,427 | | | $1,598 |
Net realized gains (losses) on Fortitude Re funds withheld assets: | | | | | | | |||
Net realized gains Fortitude Re funds withheld assets | | | 924 | | | 1,002 | | | 262 |
Net realized losses Fortitude Re embedded derivatives | | | (687) | | | (3,978) | | | (5,167) |
Net realized gains (losses) on Fortitude Re funds withheld assets | | | 237 | | | (2,976) | | | (4,905) |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Income (loss) before income tax benefit (expense) | | | 2,012 | | | (1,549) | | | (3,307) |
Income tax benefit (expense)(a) | | | (423) | | | 325 | | | 694 |
Net Income (Loss) | | | 1,589 | | | (1,224) | | | (2,613) |
Change in unrealized appreciation (depreciation) of the invested assets supporting the Fortitude Re modco arrangement classified as available for sale(a) | | | (1,488) | | | 1,165 | | | 2,479 |
Comprehensive Income (Loss) | | | $101 | | | $(59) | | | $(134) |
(a) | The income tax expense (benefit) and the tax impact in OCI was computed using Corebridge’s U.S. statutory tax rate of 21%. |
• | Paid and unpaid amounts recoverable; |
• | Whether the balance is in dispute or subject to legal collection; |
• | The relative financial health of the reinsurer as classified by the Obligor Risk Ratings (“ORRs”) we assign to each reinsurer based upon our financial reviews; insurers that are financially troubled (i.e., in run-off, have voluntarily or involuntarily been placed in receivership, are insolvent, are in the process of liquidation or otherwise subject to formal or informal regulatory restriction) are assigned ORRs that will generate a significant allowance; and |
• | Whether collateral and collateral arrangements exist. |
Year Ended December 31, (in millions) | | | 2021 | | | 2020 |
Balance, beginning of year | | | $83 | | | $40 |
Initial allowance upon CECL adoption | | | — | | | 22 |
Current period provision for expected credit losses and disputes | | | 18 | | | 21 |
Write-offs charged against the allowance for credit losses and disputes | | | — | | | — |
Balance, end of year | | | $101 | | | $83 |
Years Ended December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $7,241 | | | $7,939 | | | $9,175 |
Impact of CECL adoption | | | — | | | 15 | | | — |
Capitalizations | | | 1,000 | | | 889 | | | 1,168 |
Amortization expense | | | (1,046) | | | (532) | | | (659) |
Change related to unrealized appreciation (depreciation) of investments | | | 760 | | | (1,085) | | | (1,746) |
Other, including foreign exchange | | | (6) | | | 15 | | | 1 |
Balance, end of year | | | $7,949 | | | $7,241 | | | $7,939 |
Years Ended December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $122 | | | $130 | | | $146 |
Acquisitions | | | — | | | — | | | — |
Amortization expense | | | (11) | | | (11) | | | (15) |
Change related to unrealized appreciation (depreciation) of investments | | | (1) | | | 2 | | | (4) |
Other, including foreign exchange | | | (1) | | | 1 | | | 3 |
Balance, end of year | | | $109 | | | $122 | | | $130 |
Years Ended December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $285 | | | $437 | | | $755 |
Capitalizations | | | 11 | | | 11 | | | 20 |
Amortization expense | | | (116) | | | (64) | | | (79) |
Change related to unrealized appreciation (depreciation) of investments | | | 127 | | | (99) | | | (259) |
Balance, end of year | | | $307 | | | $285 | | | $437 |
(in millions) | | | Real Estate and Investment Entities(c) | | | Securitization and Repackaging Vehicles | | | Affordable Housing Partnerships | | | Total |
December 31, 2021 | | | | | | | | | ||||
Assets: | | | | | | | | | ||||
Bonds available for sale | | | $— | | | $5,393 | | | $— | | | $5,393 |
Other bond securities | | | — | | | — | | | — | | | — |
Equity securities | | | 223 | | | — | | | — | | | 223 |
Mortgage and other loans receivable | | | — | | | 2,359 | | | — | | | 2,359 |
Other invested assets | | | | | | | | | ||||
Alternative investments(a) | | | 3,017 | | | — | | | — | | | 3,017 |
Investment Real Estate | | | 2,257 | | | — | | | — | | | 2,257 |
Short-term investments | | | 467 | | | 151 | | | — | | | 618 |
Cash | | | 93 | | | — | | | — | | | 93 |
Accrued investment income | | | — | | | 15 | | | — | | | 15 |
Other assets | | | 188 | | | 557 | | | — | | | 745 |
Total assets(b) | | | $6,245 | | | $8,475 | | | $— | | | $14,720 |
Liabilities: | | | | | | | | | ||||
Debt of consolidated investment entities | | | $1,743 | | | $5,193 | | | $— | | | $6,936 |
Other Liabilities | | | 112 | | | 723 | | | — | | | 835 |
Total liabilities | | | $1,855 | | | $5,916 | | | $— | | | $7,771 |
December 31, 2020 | | | | | | | | | ||||
Assets: | | | | | | | | | ||||
Bonds available for sale | | | $— | | | $6,139 | | | $— | | | $6,139 |
Other bond securities | | | — | | | 97 | | | — | | | 97 |
Equity securities | | | 507 | | | — | | | — | | | 507 |
Mortgage and other loans receivable | | | — | | | 2,731 | | | — | | | 2,731 |
Other invested assets | | | | | | | | | ||||
Alternative investments(a) | | | 2,689 | | | — | | | — | | | 2,689 |
Investment Real Estate | | | 3,156 | | | — | | | 3,558 | | | 6,714 |
Short-term investments | | | 364 | | | 1,515 | | | — | | | 1,879 |
Cash | | | 128 | | | — | | | 203 | | | 331 |
Accrued investment income | | | — | | | 38 | | | — | | | 38 |
Other assets | | | 290 | | | 130 | | | 243 | | | 663 |
Total assets(b) | | | $7,134 | | | $10,650 | | | $4,004 | | | $21,788 |
Liabilities: | | | | | | | | | ||||
Debt of consolidated investment entities | | | $2,505 | | | $5,477 | | | $2,287 | | | $10,269 |
Other Liabilities | | | 180 | | | 227 | | | 187 | | | 594 |
Total liabilities | | | $2,685 | | | $5,704 | | | $2,474 | | | $10,863 |
(a) | Comprised primarily of investments in real estate joint ventures at December 31, 2021 and 2020. |
(b) | The assets of each VIE can be used only to settle specific obligations of that VIE. |
(c) | Off-balance sheet exposure primarily consisting of commitments by insurance operations and affiliates into real estate and investment entities. At December 31, 2021 and 2020, together the Company and AIG affiliates have commitments to internal parties of $2.4 billion and $2.4 billion, respectively and commitments to external parties of $0.6 billion and $0.7 billion, respectively. At December 31, 2021, $1.5 billion out of the internal commitments was from subsidiaries of Corebridge entities and $0.9 billion was from other AIG affiliates, respectively. At December 31, 2020, $1.3 billion out of the internal commitments was from subsidiaries of Corebridge entities, and $1.1 billion was from other AIG affiliates, respectively. |
(in millions) | | | Real Estate and Investment Entities | | | Securitization and Repackaging Vehicles | | | Affordable Housing Partnerships | | | Total |
December 31, 2021 | | | | | | | | | ||||
Total Revenue | | | $1,639 | | | $247 | | | $450 | | | $2,336 |
Net income attributable to noncontrolling interests | | | $858 | | | $3 | | | $68 | | | $929 |
Net income (loss) attributable to Corebridge | | | $525 | | | $(33) | | | $304 | | | $796 |
December 31, 2020 | | | | | | | | | ||||
Total Revenue | | | $477 | | | $386 | | | $275 | | | $1,138 |
Net income attributable to noncontrolling interests | | | $173 | | | $4 | | | $31 | | | $208 |
Net income attributable to Corebridge | | | $229 | | | $137 | | | $131 | | | $497 |
December 31, 2019 | | | | | | | | | ||||
Total Revenue | | | $458 | | | $566 | | | $279 | | | $1,303 |
Net income attributable to noncontrolling interests | | | $227 | | | $4 | | | $27 | | | $258 |
Net income attributable to Corebridge | | | $120 | | | $265 | | | $136 | | | $521 |
| | | | Maximum Exposure to Loss | ||||||||
(in millions) | | | Total VIE Assets | | | On-Balance Sheet(b) | | | Off-Balance Sheet(c) | | | Total |
December 31, 2021 | | | | | | | | | ||||
Real estate and investment entities(a) | | | $309,866 | | | $4,459 | | | $2,452 | | | $6,911 |
Affordable housing partnerships | | | — | | | — | | | — | | | — |
Total | | | $309,866 | | | $4,459 | | | $2,452 | | | $6,911 |
December 31, 2020 | | | | | | | | | ||||
Real estate and investment entities(a) | | | $174,752 | | | $3,120 | | | $2,369 | | | $5,489 |
Affordable housing partnerships | | | 2,801 | | | 368 | | | 4 | | | 372 |
Total | | | $177,553 | | | $3,488 | | | $2,373 | | | $5,861 |
(a) | Comprised primarily of hedge funds and private equity funds. |
(b) | At December 31, 2021 and 2020, $4.5 billion and $3.4 billion, respectively, of our total unconsolidated VIE assets were recorded as Other invested assets. |
(c) | These amounts represent our unfunded commitments to invest in private equity funds and hedge funds. |
10. | Derivatives and Hedge Accounting |
| | December 31, 2021 | | | December 31, 2020 | |||||||||||||||||||
| | Gross Derivative Assets | | | Gross Derivative Liabilities | | | Gross Derivative Assets | | | Gross Derivative Liabilities | |||||||||||||
(in millions) | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value |
Derivatives designated as hedging instruments:(a) | | | | | | | | | | | | | | | | | ||||||||
Interest rate contracts | | | $352 | | | $274 | | | $980 | | | $14 | | | $902 | | | $302 | | | $441 | | | $9 |
Foreign exchange contracts | | | 4,058 | | | 262 | | | 2,861 | | | 55 | | | 1,139 | | | 92 | | | 4,096 | | | 248 |
Derivatives not designated as hedging instruments:(a) | | | | | | | | | | | | | | | | | ||||||||
Interest rate contracts | | | 28,056 | | | 1,637 | | | 23,219 | | | 1,562 | | | 37,679 | | | 1,502 | | | 24,182 | | | 1,459 |
Foreign exchange contracts | | | 4,047 | | | 410 | | | 5,413 | | | 311 | | | 3,236 | | | 380 | | | 5,852 | | | 437 |
Equity contracts | | | 60,192 | | | 4,670 | | | 38,932 | | | 4,071 | | | 56,427 | | | 6,719 | | | 40,598 | | | 5,837 |
Credit contracts | | | 1,840 | | | 1 | | | — | | | — | | | 3,680 | | | 2 | | | — | | | — |
Other contracts(b) | | | 43,839 | | | 13 | | | 133 | | | — | | | 43,461 | | | 14 | | | 54 | | | 6 |
Total derivatives, gross | | | $142,384 | | | $7,267 | | | $71,538 | | | $6,013 | | | $146,524 | | | $9,011 | | | $75,223 | | | $7,996 |
Counterparty netting(c) | | | | | (5,785) | | | | | (5,785) | | | | | (7,723) | | | | | (7,723) | ||||
Cash collateral(d) | | | | | (798) | | | | | (37) | | | | | (533) | | | | | (28) | ||||
Total derivatives on Consolidated Balance Sheets(e) | | | | | $684 | | | | | $191 | | | | | $755 | | | | | $245 |
(a) | Fair value amounts are shown before the effects of counterparty netting adjustments and offsetting cash collateral. |
(b) | Consists primarily of stable value wraps and contracts with multiple underlying exposures. |
(c) | Represents netting of derivative exposures covered by a qualifying master netting agreement. |
(d) | Represents cash collateral posted and received that is eligible for netting. |
(e) | Freestanding derivatives only, excludes embedded derivatives. Derivative instrument assets and liabilities are recorded in Other assets and Other liabilities, respectively. Fair value of assets related to bifurcated embedded derivatives was zero at both December 31, 2021 and December 31, 2020. Fair value of liabilities related to bifurcated embedded derivatives was $17.7 billion and $17.8 billion, respectively, at December 31, 2021 and 2020. A bifurcated embedded derivative is generally presented with the host contract in the Consolidated Balance Sheets. Embedded derivatives are primarily related to guarantee features in variable annuity products, which include equity and interest rate components, and the funds withheld arrangement with Fortitude Re. For additional information see Note 7. |
| | December 31, 2021 | | | December 31, 2020 | |||||||||||||||||||
| | Gross Derivative Assets | | | Gross Derivative Liabilities | | | Gross Derivative Assets | | | Gross Derivative Liabilities | |||||||||||||
(in millions) | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value | | | Notional Amount | | | Fair Value |
Total derivatives with related parties | | | $96,862 | | | $7,182 | | | $68,623 | | | $5,778 | | | $103,326 | | | $8,938 | | | $70,128 | | | $7,722 |
Total derivatives with third parties | | | 45,522 | | | 85 | | | 2,915 | | | 235 | | | 43,198 | | | 73 | | | 5,095 | | | 274 |
Total derivatives, gross | | | $142,384 | | | $7,267 | | | $71,538 | | | $6,013 | | | $146,524 | | | $9,011 | | | $75,223 | | | $7,996 |
| | December 31, 2021 | | | December 31, 2020 | |||||||
(in millions) | | | Carrying Amount of the Hedged Assets (Liabilities) | | | Cumulative Amount of Fair Value Hedging Adjustments Included In the Carrying Amount of the Hedged Assets (Liabilities)(a) | | | Carrying Amount of the Hedged Assets (Liabilities) | | | Cumulative Amount of Fair Value Hedging Adjustments Included In the Carrying Amount of the Hedged Assets (Liabilities)(b) |
Balance sheet line item in which: hedged item is recorded: | | | | | | | | | ||||
Fixed maturities, available-for-sale at fair value | | | $7,478 | | | $— | | | $5,182 | | | $— |
Commercial mortgage and other loans | | | — | | | (6) | | | 159 | | | 4 |
Policyholder contract deposits(c) | | | (1,500) | | | (79) | | | (1,315) | | | (133) |
(a) | The cumulative amount of fair value hedging adjustments disclosed for commercial mortgage and other loans relates to hedging relationships discontinued during the year. |
(b) | There were no material fair value hedging adjustments for hedged assets and liabilities for which hedge accounting has been discontinued. |
(c) | This relates to fair value hedges on GICs. |
| | Gains/(Losses) Recognized in Earnings for: | | | ||||||||
(in millions) | | | Hedging Derivatives(a)(c) | | | Excluded Components(b)(c) | | | Hedged Items | | | Net Impact |
Year ended December 31, 2021 | | | | | | | | | ||||
Interest rate contracts: | | | | | | | | | ||||
Realized gains/(losses) | | | $— | | | $— | | | $— | | | $— |
Interest credited to policyholder account balances | | | (62) | | | 18 | | | 54 | | | 10 |
Net investment income | | | 9 | | | — | | | (11) | | | (2) |
Foreign exchange contracts: | | | | | | | | | ||||
Realized gains/(losses) | | | 260 | | | 31 | | | (260) | | | 31 |
Year ended December 31, 2020 | | | | | | | | | ||||
Interest rate contracts: | | | | | | | | | ||||
Realized gains/(losses) | | | $— | | | $— | | | $— | | | $— |
Interest credited to policyholder account balances | | | 47 | | | 1 | | | (53) | | | (5) |
Net investment income | | | (6) | | | — | | | 5 | | | (1) |
Foreign exchange contracts: | | | | | | | | | ||||
Realized gains/(losses) | | | (298) | | | 98 | | | 298 | | | 98 |
Year ended December 31, 2019 | | | | | | | | | ||||
Interest rate contracts: | | | | | | | | | ||||
Realized gains/(losses) | | | $— | | | $— | | | $— | | | $— |
Interest credited to policyholder account balances | | | 46 | | | 6 | | | (52) | | | — |
Net investment income | | | (1) | | | — | | | 1 | | | — |
Foreign exchange contracts: | | | | | | | | | ||||
Realized gains/(losses) | | | (59) | | | 136 | | | 59 | | | 136 |
(a) | Gains and losses on derivative instruments designated and qualifying in fair value hedges that are included in the assessment of hedge effectiveness. |
(b) | Gains and losses on derivative instruments designated and qualifying in fair value hedges that are excluded from the assessment of hedge effectiveness and recognized in earnings on a mark-to-market basis. |
(c) | Primarily consists of gains and losses with related parties. |
Years Ended December 31, | | | Gains (Losses) Recognized in Earnings | ||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
By Derivative Type: | | | | | | | |||
Interest rate contracts | | | $(585) | | | $1,643 | | | $1,109 |
Foreign exchange contracts | | | 476 | | | (239) | | | (6) |
Equity contracts | | | (742) | | | 206 | | | (204) |
Credit contracts | | | (11) | | | 42 | | | (4) |
Other contracts | | | 64 | | | 60 | | | 65 |
Embedded derivatives within policyholder contract deposits | | | 1,450 | | | (2,154) | | | (1,510) |
Fortitude Re funds withheld embedded derivative | | | (687) | | | (3,978) | | | (5,167) |
Total(a) | | | $(35) | | | $(4,420) | | | $(5,717) |
Years Ended December 31, | | | Gains (Losses) Recognized in Earnings | ||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
By Classification: | | | | | | | |||
Policy fees | | | $62 | | | $62 | | | $68 |
Net investment income | | | 6 | | | 2 | | | — |
Net realized gains (losses) - excluding Fortitude Re funds withheld assets | | | 555 | | | (916) | | | (734) |
Net realized gains on Fortitude Re funds withheld assets | | | 33 | | | 398 | | | 104 |
Net realized losses on Fortitude Re funds withheld embedded derivative | | | (687) | | | (3,978) | | | (5,167) |
Policyholder benefits | | | (4) | | | 12 | | | 12 |
Total(a) | | | $(35) | | | $(4,420) | | | $(5,717) |
(a) | Includes gains (losses) with AIG Markets, Inc. and AIG Financial Products Corp. of $(363) million, $2,350 million and $1,656 million for the twelve-month periods ended December 31, 2021, 2020, and 2019, respectively. Fortitude Re was a related party prior to AIG deconsolidating it on June 2, 2020. |
11. | Goodwill and Other Intangible Assets |
(in millions) | | | Life Insurance | | | Corporate and Other Operations | | | Total |
Balance at January 1, 2019: | | | | | | | |||
Goodwill - gross | | | $223 | | | $53 | | | $276 |
Accumulated impairments | | | (67) | | | (10) | | | (77) |
Net goodwill | | | 156 | | | 43 | | | 199 |
Increase (decrease) due to: | | | | | | | |||
Other(a) | | | 8 | | | 1 | | | 9 |
Balance at December 31, 2019: | | | | | | | |||
Goodwill - gross | | | 231 | | | 54 | | | 285 |
Accumulated impairments | | | (67) | | | (10) | | | (77) |
Net goodwill | | | 164 | | | 44 | | | 208 |
Increase (decrease) due to: | | | | | | | |||
Other(a) | | | 10 | | | — | | | 10 |
Balance at December 31, 2020: | | | | | | | |||
Goodwill - gross | | | 241 | | | 54 | | | 295 |
Accumulated impairments | | | (67) | | | (10) | | | (77) |
Net goodwill | | | 174 | | | 44 | | | 218 |
Increase (decrease) due to: | | | | | | | |||
Dispositions | | | — | | | (21) | | | (21) |
Other(a) | | | (5) | | | — | | | (5) |
Balance at December 31, 2021: | | | | | | | |||
Goodwill - gross | | | 236 | | | 33 | | | 269 |
Accumulated impairments | | | (67) | | | (10) | | | (77) |
Net goodwill | | | $169 | | | $23 | | | $192 |
(a) | Other primarily relates to changes in foreign currencies. |
(in millions) | | | Life Insurance | | | Corporate and Other Operations | | | Total |
Other intangible assets | | | | | | | |||
Balance at January 1, 2019 | | | $30 | | | $11 | | | $41 |
Increase (decrease) due to: | | | | | | | |||
Amortization | | | (4) | | | (2) | | | (6) |
Other | | | (2) | | | 2 | | | — |
Balance at December 31, 2019 | | | $24 | | | $11 | | | $35 |
Increase (decrease) due to: | | | | | | | |||
Amortization | | | (4) | | | (2) | | | (6) |
Other | | | 3 | | | (1) | | | 2 |
Balance at December 31, 2020 | | | $23 | | | $8 | | | $31 |
Increase (decrease) due to: | | | | | | | |||
Dispositions | | | — | | | (5) | | | (5) |
Amortization | | | (4) | | | (3) | | | (7) |
Other | | | (1) | | | — | | | (1) |
Balance at December 31, 2021 | | | $18 | | | $— | | | $18 |
12. | Insurance Liabilities |
| | Years Ended December 31, | |||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $4,751 | | | $3,794 | | | $2,907 |
Incurred guaranteed benefits* | | | 603 | | | 1,034 | | | 507 |
Paid guaranteed benefits | | | (489) | | | (470) | | | (469) |
Changes related to unrealized appreciation (depreciation) of investments | | | (360) | | | 393 | | | 849 |
Balance, end of year | | | $4,505 | | | $4,751 | | | $3,794 |
* | Incurred guaranteed benefits include the portion of assessments established as additions to reserves as well as changes in estimates (assumption unlockings) affecting these reserves. Incurred benefits, excluding changes in annual actuarial assumption updates, are approximately 67% of fees assessments collected for these universal life policies with secondary guarantees and similar features. |
At December 31, | ||||||
(dollars in millions) | | | 2021 | | | 2020 |
Account value | | | $3,313 | | | $3,078 |
Net amount at risk | | | 65,801 | | | 63,721 |
Average attained age of contract holders | | | 53 | | | 53 |
At December 31, | | | 2021 | | | 2020 | ||||||||||||
(in millions) | | | Traditional Benefits | | | Interest-Sensitive Benefits | | | Total | | | Traditional Benefits | | | Interest-Sensitive Benefits | | | Total |
Future policy benefits: | | | | | | | | | | | | | ||||||
Individual Retirement | | | $1,374 | | | $1,530 | | | $2,904 | | | $1,311 | | | $1,389 | | | $2,700 |
Group Retirement | | | 226 | | | 245 | | | 471 | | | 282 | | | 221 | | | 503 |
Life Insurance | | | 12,037 | | | 4,928 | | | 16,965 | | | 11,518 | | | 5,123 | | | 16,641 |
Institutional Markets | | | 14,194 | | | — | | | 14,194 | | | 11,093 | | | — | | | 11,093 |
Fortitude Re | | | 23,217 | | | — | | | 23,217 | | | 23,669 | | | 54 | | | 23,723 |
Total Future policy benefits | | | $51,048 | | | $6,703 | | | $57,751 | | | $47,873 | | | $6,787 | | | $54,660 |
* | Traditional benefits represent future policy benefits for traditional long-duration insurance contracts such as life contingent payout annuities, participating life, traditional life and accident and health insurance. Interest-sensitive benefits represent future policy benefits for investment-oriented contracts such as universal life, variable and fixed annuities, and fixed index annuities. |
At December 31, | ||||||
(in millions) | | | 2021 | | | 2020 |
Policyholder contract deposits(a)(b): | | | | | ||
Individual Retirement | | | $87,664 | | | $85,098 |
Group Retirement | | | 44,087 | | | 43,804 |
Life Insurance | | | 10,299 | | | 10,283 |
Institutional Markets | | | 10,970 | | | 11,560 |
Fortitude Re(c) | | | 3,826 | | | 4,147 |
Total Policyholder contract deposits | | | $156,846 | | | $154,892 |
(a) | As of December 31, 2021, reserves related to Embedded Derivatives as part of Policyholder contract deposit include $8.0 billion in Individual Retirement, $891 million in Group Retirement, $765 million in Life Insurance and $54 million in Institutional Markets. As of December 31, 2020, reserves related to Embedded Derivatives as part of Policyholder contract deposit include $8.4 billion in individual retirement, $989 million in Group Retirement, $649 million in Life Insurance and $38 million in Institutional Markets. |
(b) | As of December 31, 2021 and 2020, FHLB funding agreements included in Policyholder contract deposits include $1.1 billion in Individual Retirement, $209 million in Group Retirement and $2.2 billion in Institutional Markets. |
(c) | Balances related to Fortitude Re are a component of Corporate and Other. |
December 31, 2021 | | | Gross Amounts | | | Payments due by period | | | ||||||||||
(in millions) | | | 2022 | | | 2023-2024 | | | 2025-2026 | | | Thereafter | | | Stated Interest rates | |||
FHLB Facility | | | | | | | | | | | | | ||||||
FHLB of Dallas | | | $3,357 | | | — | | | 227 | | | 254 | | | $2,876 | | | DNA Auction* + 22 to 30 bps |
FHLB of New York | | | 241 | | | — | | | 94 | | | 147 | | | — | | | 1.52% to 2.70% |
| | $3,598 | | | — | | | 321 | | | 401 | | | $2,876 | | |
* | Discount Note Advance (“DNA”) Auction is based on either a 4-Week or 3-Month tenor, depending on contractual terms of each borrowing. |
13. | Fixed, Fixed Index and Variable Annuity Contracts |
At December 31, | | | 2021 | | | 2020 | ||||||
(in millions) | | | Individual Retirement | | | Group Retirement | | | Individual Retirement | | | Group Retirement |
Equity Funds | | | $28,524 | | | $33,718 | | | $25,994 | | | $30,733 |
Bond Funds | | | 4,651 | | | 4,364 | | | 4,499 | | | 4,154 |
Balanced Funds | | | 23,018 | | | 6,293 | | | 21,340 | | | 5,636 |
Money Market Funds | | | 546 | | | 459 | | | 627 | | | 506 |
Total | | | $56,739 | | | $44,834 | | | $52,460 | | | $41,029 |
At December 31, 2021 | ||||||||||||
(dollars in millions) | | | Return of Account Value | | | Return of Premium | | | Rollups | | | Highest Contract Value Attained |
Account values: | | | | | | | | | ||||
General Account | | | $382 | | | $4,055 | | | $447 | | | $1,366 |
Separate Accounts | | | 3,543 | | | 34,811 | | | 2,453 | | | 15,932 |
Total Account Values | | | $3,925 | | | $38,866 | | | $2,900 | | | $17,298 |
Net amount at risk – Gross | | | $— | | | $22 | | | $363 | | | $341 |
Net amount at risk – Net | | | $— | | | $21 | | | $327 | | | $257 |
Average attained age of contract holders by product | | | 66 | | | 70 | | | 75 | | | 71 |
Percentage of policyholders age 70 and over | | | 27.8% | | | 47.0% | | | 66.9% | | | 58.1% |
Range of guaranteed minimum return rates | | | 0.0%-4.5% | |||||||||
At December 31, 2020 | | | | | | | | | ||||
Account values: | | | | | | | | | ||||
General Account | | | $267 | | | $4,124 | | | $459 | | | $1,426 |
Separate Accounts | | | 2,357 | | | 32,414 | | | 2,448 | | | 15,241 |
Total Account Values | | | $2,624 | | | $36,538 | | | $2,907 | | | $16,667 |
Net amount at risk – Gross | | | $— | | | $19 | | | $396 | | | $372 |
Net amount at risk – Net | | | $— | | | $18 | | | $355 | | | $276 |
Average attained age of contract holders by product | | | 66 | | | 69 | | | 76 | | | 72 |
Percentage of policyholders age 70 and over | | | 26.6% | | | 43.6% | | | 65.4% | | | 56.0% |
Range of guaranteed minimum return rates | | | 0.0%-4.5% |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $382 | | | $371 | | | $355 |
Reserve increase (decrease) | | | 103 | | | 36 | | | 40 |
Benefits paid | | | (33) | | | (41) | | | (39) |
Changes related to unrealized appreciation (depreciation) of investments | | | (7) | | | 16 | | | 15 |
Balance, end of year | | | $445 | | | $382 | | | $371 |
(dollars in millions) | | | Return of Value | | | Return of Premium | | | Rollups(a) | | | Highest Contract Value Attained |
Account values: | | | | | | | | | ||||
General Account | | | $35 | | | $5,511 | | | $18,863 | | | $4 |
Separate Accounts | | | 290 | | | 6,056 | | | 38,419 | | | 69 |
Total Account Values | | | $325 | | | $11,567 | | | $57,282 | | | $73 |
Net amount at risk - Gross | | | $— | | | $9 | | | $152 | | | $— |
Net amount at risk – Net | | | $— | | | $9 | | | $152 | | | $— |
Average attained age of contract holders by product | | | 64 | | | 64 | | | 63 | | | 68 |
Percentage of policyholders age 70 and over | | | 14.9% | | | 17.9% | | | 14.2% | | | 31.1% |
Range of guaranteed minimum return rates | | | 0.0%-4.5% |
(dollars in millions) | | | Return of Value | | | Return of Premium | | | Rollups(a) | | | Highest Contract Value Attained |
At December 31, 2020 | | | | | | | | | ||||
Account values: | | | | | | | | | ||||
General Account | | | $28 | | | $5,563 | | | $19,053 | | | $3 |
Separate Accounts | | | 220 | | | 5,527 | | | 35,226 | | | 56 |
Total Account Values | | | $248 | | | $11,090 | | | $54,279 | | | $59 |
Net amount at risk - Gross | | | $— | | | $10 | | | $170 | | | $— |
Net amount at risk – Net | | | $— | | | $10 | | | $170 | | | $— |
Average attained age of contract holders by product | | | 64 | | | 64 | | | 62 | | | 67 |
Percentage of policyholders age 70 and over | | | 13.5% | | | 16.6% | | | 13.0% | | | 29.2% |
Range of guaranteed minimum return rates | | | 0.0%-4.5% |
(a) | Group Retirement guaranteed rollup benefits revert to the Return of Premium at age 70. As of December 31, 2021, this includes 192,606 contracts for policyholders age 70 and over, with associated account values of $8.3 billion held in the general account and $8.5 billion held in separate accounts; as of December 31, 2020, this includes 181,793 contracts for policyholders age 70 and over, with associated account values of $7.8 billion held in the general account and $7.1 billion held in separate accounts. These contracts which have reverted to return of premium benefits due to the attained age of the policyholder represent a net amount at risk of $19 million and $20 million at December 31, 2021 and 2020, respectively. |
Years Ended December 31, | | ||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $40 | | | $21 | | | $32 |
Reserve increase (decrease) | | | 3 | | | 2 | | | (10) |
Benefits paid | | | (2) | | | (2) | | | (1) |
Changes related to unrealized appreciation (depreciation) of investments | | | (6) | | | 19 | | | — |
Balance, end of year | | | $35 | | | $40 | | | $21 |
(a) | The assumed reinsurance reserves for GMDB liability related to variable annuity contract is $16.0 million, $16.7 million and $15.3 million as of December 31, 2021, 2020 and 2019 respectively. |
(dollars in millions) | | | Fixed Annuities | | | Fixed Index Annuities | | | Total |
At December 31, 2021 | | | | | | | |||
Account values(a): | | | | | | | |||
Fixed Accounts | | | $3,541 | | | $487 | | | $4,028 |
Indexed Accounts | | | — | | | 6,361 | | | 6,361 |
Total Account Values | | | $3,541 | | | $6,848 | | | $10,389 |
GMWB and GMDB Reserve: | | | | | | | |||
Base Reserve | | | $270 | | | $467 | | | $737 |
Reserves related to unrealized appreciation of investments | | | 187 | | | 161 | | | 348 |
Total GMWB and GMDB Reserve | | | $457 | | | $628 | | | $1,085 |
Average attained age of contract holders by product | | | 68 | | | 67 | | | — |
(dollars in millions) | | | Fixed Annuities | | | Fixed Index Annuities | | | Total |
At December 31, 2020 | | | | | | | |||
Account values(a): | | | | | | | |||
Fixed Accounts | | | $3,067 | | | $504 | | | $3,571 |
Indexed Accounts | | | — | | | 5,945 | | | 5,945 |
Total Account Values | | | $3,067 | | | $6,449 | | | $9,516 |
GMWB and GMDB Reserve: | | | | | | | |||
Base Reserve | | | $138 | | | $371 | | | $509 |
Reserves related to unrealized appreciation of investments | | | 215 | | | 266 | | | 481 |
Total GMWB and GMDB Reserve | | | $353 | | | $637 | | | $990 |
Average attained age of contract holders by product | | | 67 | | | 67 | | | — |
(a) | Fixed annuities that offer GMWB exposures and fixed index annuities that offer GMWB and GMDB exposures are offered through the general account. |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $353 | | | $38 | | | $14 |
Reserve increase (decrease)* | | | 132 | | | 100 | | | 24 |
Benefits paid | | | — | | | — | | | — |
Changes related to unrealized appreciation (depreciation) of investments | | | (28) | | | 215 | | | — |
Balance, end of year | | | $457 | | | $353 | | | $38 |
* | Reserve increase in Fixed Annuities products with GMWB liability is driven by the sale of a new product issued in 2017. |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $637 | | | $439 | | | $153 |
Reserve increase (decrease)* | | | 94 | | | 74 | | | 153 |
Benefits paid | | | — | | | — | | | — |
Changes related to unrealized appreciation (depreciation) of investments | | | (103) | | | 124 | | | 133 |
Balance, end of year | | | $628 | | | $637 | | | $439 |
At December 31, 2021 | |||||||||
(dollars in millions) | | | Fixed Annuities | | | Fixed Index Annuities | | | Total |
Account values(a): | | | | | | | |||
Fixed Account | | | $603 | | | $129 | | | $732 |
Indexed Accounts | | | — | | | 1,409 | | | 1,409 |
Total Account Values | | | $603 | | | $1,538 | | | $2,141 |
GMWB Reserves: | | | | | | | |||
Base Reserve | | | $42 | | | $101 | | | $143 |
Reserves related to unrealized appreciation of investments | | | 5 | | | 46 | | | 51 |
Total GMWB Reserves | | | $47 | | | $147 | | | $194 |
Average attained age of contract holders by product | | | 69 | | | 68 | | | — |
At December 31, 2020 | | | | | | | |||
Account values(a): | | | | | | | |||
Fixed Account | | | $546 | | | $131 | | | $677 |
Indexed Accounts | | | — | | | 1,391 | | | 1,391 |
Total Account Values | | | $546 | | | $1,522 | | | $2,068 |
GMWB Reserves: | | | | | | | |||
Base Reserve | | | $24 | | | $71 | | | $95 |
Reserves related to unrealized appreciation of investments | | | 8 | | | 62 | | | 70 |
Total GMWB Reserves | | | $32 | | | $133 | | | $165 |
Average attained age of contract holders by product | | | 71 | | | 67 | | | — |
(a) | Fixed annuities and fixed index annuities that offer GMWB exposures are offered through the general account. |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $32 | | | $5 | | | $1 |
Reserve increase (decrease) | | | 18 | | | 19 | | | 4 |
Benefits paid | | | — | | | — | | | — |
Changes related to unrealized appreciation (depreciation) of investments | | | (3) | | | 8 | | | — |
Balance, end of year | | | $47 | | | $32 | | | $5 |
* | Reserve increase in Fixed Annuities products with GMWB liability is driven by the sale of a new product issued in 2017. |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Balance, beginning of year | | | $133 | | | $103 | | | $26 |
Reserve increase (decrease) | | | 30 | | | 12 | | | 29 |
Benefits paid | | | — | | | — | | | — |
Changes related to unrealized appreciation (depreciation) of investments | | | (16) | | | 18 | | | 48 |
Balance, end of year | | | $147 | | | $133 | | | $103 |
14. | Debt |
At December 31, 2021 | ||||||||||||
(in millions) | | | Range of Interest Rate(s) | | | Maturity Date(s) | | | Balance at December 31, 2021 | | | Balance at December 31, 2020 |
Short-term debt issued by Corebridge: | | | | | | | | | ||||
Affiliated senior promissory note with AIG, Inc. | | | LIBOR+100bps | | | 2022 | | | $8,317 | | | — |
Total short-term debt | | | | | | | 8,317 | | | — | ||
Long-term debt issued by Corebridge: | | | | | | | | | ||||
AIGLH notes and bonds payable | | | 6.63% - 7.50% | | | 2025 - 2029 | | | $200 | | | $282 |
AIGLH junior subordinated debt | | | 7.57% - 8.50% | | | 2030 - 2046 | | | 227 | | | 361 |
Affiliated note with AIG Europe S.A. | | | | | | | — | | | 9 | ||
Affiliated note with Lexington Insurance Company | | | | | | | — | | | 253 | ||
Total long-term debt | | | | | | | 427 | | | 905 | ||
Debt of consolidated investment entities - not guaranteed by Corebridge | | | 0.00% - 8.07% | | | 2022 - 2051 | | | 6,936 | | | 10,341 |
Total debt | | | | | | | $15,680 | | | $11,246 |
December 31, 2021 | | | | | Year Ending | ||||||||||||||||
(in millions) | | | Total | | | 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | Thereafter |
Short-term and long-term debt issued by Corebridge: | | | | | | | | | | | | | | | |||||||
AIGLH notes and bonds payable | | | $200 | | | $— | | | $— | | | $— | | | $101 | | | $— | | | $99 |
AIGLH junior subordinated debt | | | 227 | | | — | | | — | | | — | | | — | | | — | | | 227 |
Affiliated senior promissory note with AIG, Inc. | | | 8,317 | | | 8,317 | | | — | | | — | | | — | | | — | | | — |
Total short-term and long-term debt issued by Corebridge(a) | | | $8,744 | | | $8,317 | | | $— | | | $— | | | $101 | | | $— | | | $326 |
(a) | Does not reflect $6.9 billion of notes issued by consolidated investment entities for which recourse is limited to the assets of the respective investment entities and for which there is no recourse to the general credit of Corebridge. |
At December 31, 2021 | ||||||||||||
(in millions) | | | Size | | | Available Amount | | | Expiration | | | Effective Date |
AIG Life Holdings (January 2015) | | | $500 | | | $500 | | | N/A* | | | 1/1/2015 |
AIG Life Holdings (April 2015) | | | $500 | | | $500 | | | N/A* | | | 4/1/2015 |
AIG Life Limited | | | $25 | | | $25 | | | 8/14/2023 | | | 8/14/2018 |
* | These credit facilities are intended to be evergreen. |
15. | Contingencies, Commitments and Guarantees |
(in millions) | | | |
2022 | | | $21 |
2023 | | | 17 |
2024 | | | 9 |
2025 | | | 8 |
2026 | | | 7 |
Remaining years after 2026 | | | 10 |
Total undiscounted lease payments | | | 72 |
Less: Present value adjustment | | | 6 |
Net lease liabilities | | | $66 |
• | For additional discussion on commitments and guarantees associated with VIEs see Note 9 |
• | For additional disclosures about derivatives see Note 10 |
• | For additional disclosures about debt see Note 14 |
• | For additional disclosures about related parties see Note 21 |
16. | Equity and Redeemable Noncontrolling Interest |
(in millions) | | | Unrealized Appreciation (Depreciation) of Fixed Maturity Securities on Which Other-Than- Temporary Credit Impairments Were Taken | | | Unrealized Appreciation (Depreciation) of All Other Investments | | | Foreign Currency Translation Adjustments | | | Retirement Plan Liabilities Adjustment | | | Total |
Balance, January 1, 2019, net of tax | | | $(138) | | | $2,599 | | | $(50) | | | $10 | | | $2,421 |
Change in unrealized appreciation | | | | | | | | | | | |||||
of investments | | | 850 | | | 11,762 | | | — | | | — | | | 12,612 |
Change in deferred policy acquisition costs | | | | | | | | | | | |||||
adjustment and other | | | 9 | | | (2,011) | | | — | | | — | | | (2,002) |
Change in future policy benefits | | | — | | | (2,049) | | | — | | | — | | | (2,049) |
Change in foreign currency translation adjustments | | | — | | | — | | | 15 | | | — | | | 15 |
Change in net actuarial loss | | | — | | | — | | | — | | | (3) | | | (3) |
Change in deferred tax asset (liability) | | | (186) | | | (1,475) | | | 3 | | | 1 | | | (1,657) |
Total other comprehensive income (loss) | | | 673 | | | 6,227 | | | 18 | | | (2) | | | 6,916 |
Noncontrolling interests | | | — | | | — | | | 8 | | | — | | | 8 |
Balance, December 31, 2019, net of tax | | | $535 | | | $8,826 | | | $(40) | | | $8 | | | $9,329 |
(in millions) | | | Unrealized Appreciation (Depreciation) of Fixed Maturity Securities on Which Allowance for Credit Losses Was Taken | | | Unrealized Appreciation (Depreciation) of All Other Investments | | | Foreign Currency Translation Adjustments | | | Retirement Plan Liabilities Adjustment | | | Total |
Balance, January 1, 2020, net of tax | | | $— | | | $9,361 | | | $(40) | | | $8 | | | $9,329 |
Change in unrealized appreciation (depreciation) of investments | | | (89) | | | 8,984 | | | — | | | — | | | 8,895 |
Change in deferred policy acquisition costs adjustment and other | | | 11 | | | (1,194) | | | — | | | — | | | (1,183) |
Change in future policy benefits | | | — | | | (870) | | | — | | | — | | | (870) |
Change in foreign currency translation adjustments | | | — | | | — | | | 61 | | | — | | | 61 |
Change in net actuarial loss | | | — | | | — | | | — | | | (2) | | | (2) |
Change in deferred tax asset (liability) | | | 16 | | | (1,583) | | | (4) | | | — | | | (1,571) |
Total other comprehensive income (loss) | | | (62) | | | 5,337 | | | 57 | | | (2) | | | 5,330 |
Noncontrolling interests | | | — | | | — | | | 6 | | | — | | | 6 |
Balance, December 31, 2020, net of tax | | | $(62) | | | $14,698 | | | $11 | | | $6 | | | $14,653 |
Change in unrealized appreciation (depreciation) of investments | | | 39 | | | (7,496) | | | — | | | — | | | (7,457) |
Change in deferred policy acquisition costs adjustment and other | | | (11) | | | 973 | | | — | | | — | | | 962 |
Change in future policy benefits | | | — | | | 915 | | | — | | | — | | | 915 |
Change in foreign currency translation adjustments | | | — | | | — | | | (22) | | | — | | | (22) |
Change in net actuarial loss | | | — | | | — | | | — | | | 1 | | | 1 |
Change in deferred tax asset (liability) | | | (6) | | | 1,099 | | | 2 | | | — | | | 1,095 |
Total other comprehensive income (loss) | | | 22 | | | (4,509) | | | (20) | | | 1 | | | (4,506) |
Other | | | — | | | 20 | | | — | | | — | | | 20 |
Noncontrolling interests | | | — | | | — | | | — | | | — | | | — |
Balance, December 31, 2021, net of tax | | | $(40) | | | $10,209 | | | $(9) | | | $7 | | | $10,167 |
(in millions) | | | Unrealized Appreciation (Depreciation) of Fixed Maturity Securities on Which Other-Than- Temporary Credit Impairments Were Taken | | | Unrealized Appreciation (Depreciation) of All Other Investments | | | Foreign Currency Translation Adjustments | | | Retirement Plan Liabilities Adjustment | | | Total |
December 31, 2019 | | | | | | | | | | | |||||
Unrealized change arising during period | | | $858 | | | $7,928 | | | $15 | | | $(3) | | | $8,798 |
Less: Reclassification adjustments included in net income | | | (1) | | | 226 | | | — | | | — | | | 225 |
Total other comprehensive income, before income tax expense (benefit) | | | 859 | | | 7,702 | | | 15 | | | (3) | | | 8,573 |
Less: Income tax expense (benefit) | | | 186 | | | 1,475 | | | (3) | | | (1) | | | 1,657 |
Total other comprehensive income, net of income tax expense (benefit) | | | $673 | | | $6,227 | | | $18 | | | $(2) | | | $6,916 |
(in millions) | | | Unrealized Appreciation (Depreciation) of Fixed Maturity Securities on Which Allowance for Credit Losses Was Taken | | | Unrealized Appreciation (Depreciation) of All Other Investments | | | Foreign Currency Translation Adjustments | | | Retirement Plan Liabilities Adjustment | | | Total |
December 31, 2020 | | | | | | | | | | | |||||
Unrealized change arising during period | | | $(107) | | | $7,558 | | | $60 | | | $(2) | | | $7,509 |
Less: Reclassification adjustments included in net income | | | (29) | | | 636 | | | — | | | — | | | 607 |
Total other comprehensive income (loss), before income tax expense (benefit) | | | (78) | | | 6,922 | | | 60 | | | (2) | | | 6,902 |
Less: Income tax expense (benefit) | | | (16) | | | 1,585 | | | 3 | | | — | | | 1,572 |
Total other comprehensive income (loss), net of income tax expense (benefit) | | | $(62) | | | $5,337 | | | $57 | | | $(2) | | | $5,330 |
December 31, 2021 | | | | | | | | | | | |||||
Unrealized change arising during period | | | $28 | | | $(4,860) | | | $(21) | | | $1 | | | $(4,852) |
Less: Reclassification adjustments included in net income | | | — | | | 748 | | | — | | | — | | | 748 |
Total other comprehensive income (loss), before income tax expense (benefit) | | | 28 | | | (5,608) | | | (21) | | | 1 | | | (5,600) |
Less: Income tax expense (benefit) | | | 6 | | | (1,099) | | | (1) | | | — | | | (1,094) |
Total other comprehensive income (loss), net of income tax expense (benefit) | | | $22 | | | $(4,509) | | | $(20) | | | $1 | | | $(4,506) |
Years Ended December 31, | | | Amount Reclassified from AOCI | | | Affected Line Item in the Consolidated Statements of Income (Loss) | ||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 | | ||
Unrealized appreciation (depreciation) of fixed maturity securities on which allowance for credit losses was taken | | | | | | | | | ||||
Investments | | | $— | | | $(29) | | | $— | | | Net realized gains (losses) |
Total | | | — | | | (29) | | | — | | | |
Unrealized appreciation (depreciation) of fixed maturity securities on which other-than-temporary credit impairments were taken | | | | | | | | | ||||
Investments | | | $— | | | $— | | | $(1) | | | Net realized gains (losses) |
Total | | | — | | | — | | | (1) | | | |
Unrealized appreciation (depreciation) of all other investments | | | | | | | | | ||||
Investments | | | $748 | | | $636 | | | $226 | | | Net realized gains (losses) |
Total | | | 748 | | | 636 | | | 226 | | | |
Change in retirement plan liabilities adjustment | | | | | | | | | ||||
Prior-service credit | | | $— | | | $— | | | $— | | | |
Actuarial losses | | | — | | | — | | | — | | | |
Total | | | — | | | — | | | — | | | |
Total reclassifications for the year | | | $748 | | | $607 | | | $225 | | |
(in millions) | | | Redeemable Noncontrolling Interest |
Balance, December 31, 2019 | | | $— |
Contributions from noncontrolling interests | | | 50 |
Net income attributable to redeemable noncontrolling interest | | | 1 |
Balance, December 31, 2020 | | | 51 |
Contributions from noncontrolling interests | | | 32 |
Net income (loss) attributable to redeemable noncontrolling interest | | | — |
Balance, December 31, 2021 | | | $83 |
17. | Earnings Per Common Share |
| | Years Ended December 31, | ||||||||||||||||
| | 2021 | | | 2020 | | | 2019 | ||||||||||
(dollars in millions, except per common share data) | | | Class A | | | Class B | | | Class A | | | Class B | | | Class A | | | Class B |
Net income available to Corebridge common shareholders - basic and diluted | | | $6,859 | | | $496 | | | $578 | | | $64 | | | $45 | | | 5 |
Weighted average common shares outstanding - basic and diluted(a) | | | 90,100 | | | 9,900 | | | 90,100 | | | 9,900 | | | 90,100 | | | 9,900 |
Earnings per share - basic and diluted | | | $76,127 | | | $50,101 | | | $6,420 | | | $6,420 | | | $500 | | | 500 |
(a) | On November 1, 2021, following the completion of the stock split and recapitalization, 90,100 shares of Class A Common Stock and 9,900 shares of Class B Common Stock were outstanding. This number of shares remained outstanding at December 31, 2021. The results of the stock split have been applied retrospectively for periods prior to November 1, 2021. |
18. | Statutory Financial Data and Restrictions |
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Years Ended December 31, | | | | | | | |||
Statutory net income (loss)(a): | | | | | | | |||
Insurance Operations companies: | | | | | | | |||
Domestic | | | $2,588 | | | $482 | | | $325 |
Foreign | | | (4) | | | 6 | | | 7 |
Total Insurance Operations companies | | | $2,584 | | | $488 | | | $332 |
At December 31, | | | | | | | |||
Statutory capital and surplus(a): | | | | | | | |||
Insurance Operations companies: | | | | | | | |||
Domestic | | | $12,471 | | | $10,960 | | | |
Foreign | | | 612 | | | 646 | | | |
Total Insurance Operations companies | | | $13,083 | | | $11,606 | | | |
Aggregate minimum required statutory capital and surplus: | | | | | | | |||
Insurance Operations companies: | | | | | | | |||
Domestic | | | $3,903 | | | $3,574 | | | |
Foreign | | | 208 | | | 201 | | | |
Total Insurance Operations companies | | | $4,111 | | | $3,775 | | |
(a) | The 2021 amounts reflect our best estimate of the statutory net income, capital and surplus as of the dates these financial statements were issued. |
• | Effective December 31, 2019 and periods through September 30, 2020, AGL, a life insurance subsidiary domiciled in Texas, implemented a permitted statutory accounting practice to recognize an admitted asset related to the notional value of coverage defined in an excess of loss reinsurance agreement. This reinsurance agreement has a 20-year term and provides coverage to AGL for aggregate claims incurred during the agreement term associated with guaranteed living benefits on certain fixed index annuities generally issued prior to April 2019 (“Block 1”) exceeding an attachment point as defined in the agreement. |
• | Effective October 1, 2020 and periods through September 30, 2023, this permitted practice was expanded to similarly recognize an additional admitted asset related to the net notional value of coverage as defined in a separate excess of loss reinsurance agreement. This additional reinsurance agreement has a 25-year term and provides coverage to the subsidiary for aggregate excess of loss claims associated with guaranteed living benefits on a block of fixed index annuities generally issued in April 2019 or later, including new business issued after the effective date (“Block 2”). |
• | Effective December 31, 2020, this expanded permitted practice also extended the term of the permitted practice for Block 1 from September 30, 2020 to September 30, 2023. The reinsurance agreement covering contracts in Block 1 was also amended to conform certain provisions with the Block 2 reinsurance agreement. |
19. | Employee Benefits |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Share-based compensation expense - pre-tax | | | $88 | | | $74 | | | $74 |
Share-based compensation expense - after tax | | | 70 | | | 58 | | | 58 |
20. | Income Taxes |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
U.S. | | | $9,518 | | | $827 | | | $115 |
Foreign | | | 609 | | | 24 | | | 24 |
Total | | | $10,127 | | | $851 | | | $139 |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
U.S. and Foreign components of actual income tax expense: | | | | | | | |||
U.S.: | | | | | | | |||
Current | | | $1,943 | | | $1,714 | | | $1,310 |
Deferred | | | (81) | | | (1,726) | | | (1,471) |
Foreign: | | | | | | | |||
Current | | | 3 | | | 10 | | | 5 |
Deferred | | | (22) | | | (13) | | | (12) |
Total | | | $1,843 | | | $(15) | | | $(168) |
Years Ended December 31, | | | 2021 | | | 2020 | | | 2019 | ||||||||||||||||||
(dollars in millions) | | | Pre-Tax Income (Loss) | | | Tax Expense/ (Benefit) | | | Percent of Pre-Tax Income (Loss) | | | Pre-Tax Income (Loss) | | | Tax Expense/ (Benefit) | | | Percent of Pre-Tax Income (Loss) | | | Pre-Tax Income (Loss) | | | Tax Expense/ (Benefit) | | | Percent of Pre-Tax Income (loss) |
U.S. federal income tax at statutory rate | | | $10,127 | | | $2,127 | | | 21.0% | | | $851 | | | $178 | | | 21.0% | | | $139 | | | $29 | | | 21.0% |
Adjustments: | | | | | | | | | | | | | | | | | | | |||||||||
Uncertain tax positions | | | — | | | (69) | | | (0.7) | | | — | | | 17 | | | 2.0 | | | — | | | 35 | | | 25.2 |
Reclassifications from accumulated other comprehensive income | | | — | | | (108) | | | (1.1) | | | — | | | (100) | | | (11.8) | | | — | | | (114) | | | (82.0) |
Non-controlling interest | | | — | | | (197) | | | (1.9) | | | — | | | (47) | | | (5.5) | | | — | | | (52) | | | (37.4) |
Dividends received deduction | | | — | | | (37) | | | (0.4) | | | — | | | (39) | | | (4.6) | | | — | | | (40) | | | (28.8) |
State income taxes | | | — | | | 105 | | | 1.0 | | | — | | | (4) | | | (0.5) | | | — | | | 14 | | | 10.0 |
Other | | | — | | | (5) | | | — | | | — | | | 1 | | | 0.1 | | | — | | | 5 | | | 3.6 |
Adjustments to prior year tax returns | | | — | | | (3) | | | — | | | — | | | (27) | | | (3.2) | | | — | | | (49) | | | (35.3) |
Share based compensation payments excess tax deduction | | | — | | | 4 | | | — | | | — | | | 10 | | | 1.2 | | | — | | | 7 | | | 5.0 |
Valuation allowance | | | — | | | 26 | | | 0.3 | | | — | | | (4) | | | (0.5) | | | — | | | (3) | | | (2.2) |
Consolidated total amounts | | | $10,127 | | | $1,843 | | | 18.2% | | | $851 | | | $(15) | | | (1.8)% | | | $139 | | | $(168) | | | (120.9)% |
December 31, | ||||||
(in millions) | | | 2021 | | | 2020 |
Deferred tax assets: | | | | | ||
Losses and tax credit carryforwards | | | $214 | | | $423 |
Basis differences on investments | | | 3,044 | | | 3,843 |
Fortitude Re funds withheld embedded derivative | | | 541 | | | 942 |
Life policy reserves | | | 3,809 | | | 2,690 |
Accruals not currently deductible, and other | | | 4 | | | — |
Investments in foreign subsidiaries | | | 1 | | | 13 |
Loss reserve discount | | | — | | | 2 |
Fixed assets and intangible assets | | | 1,160 | | | 1,079 |
Other | | | 237 | | | 225 |
Employee benefits | | | — | | | — |
Total deferred tax assets | | | 9,010 | | | 9,217 |
Deferred tax liabilities: | | | | | ||
Employee benefits | | | (32) | | | (15) |
Accruals not currently deductible, and other | | | — | | | (4) |
Deferred policy acquisition costs | | | (1,646) | | | (1,714) |
Unrealized (gains)/losses related to available for sale debt securities | | | (2,561) | | | (3,730) |
Total deferred tax liabilities | | | (4,239) | | | (5,463) |
Net deferred tax assets before valuation allowance | | | 4,771 | | | 3,754 |
Valuation allowance | | | (169) | | | (126) |
Net deferred tax assets (liabilities) | | | $4,602 | | | $3,628 |
December 31, 2021 | | | Gross | | | Tax Effected | | | Periods(a) | | | Unlimited Carryforward Periods and Carryforward Periods(a) 2028 - After | |||||||||||||||
(in millions) | | | 2022 | | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | | ||||||||
Net operating loss carryforwards | | | $580 | | | $122 | | | $— | | | $— | | | $— | | | $— | | | $— | | | $— | | | $122 |
Capital loss carryforwards | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — |
Foreign tax credit carryforwards | | | | | 10 | | | — | | | 10 | | | — | | | — | | | — | | | — | | | — | |
Other carryforwards | | | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Total Corebridge U.S. federal tax loss and credit carryforwards on a U.S. GAAP basis | | | | | $132 | | | $— | | | $10 | | | $— | | | $— | | | $— | | | $— | | | $122 |
(a) | Carryforward periods are based on U.S. tax laws governing utilization of tax attributes. Expiration periods are based on the year the carryforward was generated. |
• | the nature, frequency, and amount of cumulative financial reporting income and losses in recent years; |
• | the sustainability of recent operating profitability of our subsidiaries; |
• | the predictability of future operating profitability of the character necessary to realize the net deferred tax asset, including forecasts of future income for each of our businesses and actual and planned business and operational changes; |
• | the carryforward periods for the net operating loss, capital loss and foreign tax credit carryforwards, including the effect of reversing taxable temporary differences; and |
• | prudent and feasible actions and tax planning strategies that would be implemented, if necessary, to protect against the loss of the deferred tax asset. |
| | 2021 | | | 2020 | |
U.S. deferred tax assets | | | $6,931 | | | $7,130 |
Net deferred tax assets in OCI | | | (2,559) | | | (3,721) |
US valuation allowance | | | (18) | | | — |
Net U.S. deferred tax assets | | | 4,354 | | | 3,409 |
Net foreign, state & local deferred tax assets | | | 401 | | | 345 |
Foreign, state & local valuation allowance | | | (151) | | | (126) |
Net foreign, state & local deferred tax assets | | | 250 | | | 219 |
Subtotal - Net U.S, foreign, state & local deferred tax assets | | | 4,604 | | | 3,628 |
Net foreign, state & local deferred tax liabilities | | | (2) | | | — |
Total Corebridge net deferred tax assets (liabilities) | | | $4,602 | | | $3,628 |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Gross unrecognized tax benefits, beginning of year | | | $917 | | | $1,173 | | | $1,173 |
Increases in tax positions for prior years | | | — | | | 1 | | | — |
Decreases in tax positions for prior years | | | (899) | | | (5) | | | — |
Increases in tax positions for current year | | | — | | | — | | | — |
Settlements | | | — | | | (252) | | | — |
Gross unrecognized tax benefits, end of year | | | $18 | | | $917 | | | $1,173 |
At December 31, 2021 | | | Open Tax Years |
Major Tax Jurisdiction | | | |
United States | | | 2007-2020 |
United Kingdom | | | 2020 |
21. | Related Parties |
Years Ended December 31, | |||||||||
(dollars in millions) | | | 2021 | | | 2020 | | | 2019 |
Revenues: | | | | | | | |||
Other income | | | $85 | | | $88 | | | $85 |
Net investment income - excluding Fortitude Re funds withheld assets | | | (14) | | | (12) | | | 26 |
Total revenues | | | $71 | | | $76 | | | $111 |
Expenses: | | | | | | | |||
General operating and other expenses | | | $349 | | | $317 | | | $342 |
Interest expense | | | 82 | | | 146 | | | 186 |
Loss on extinguishment of debt | | | 145 | | | — | | | — |
Total expenses | | | $576 | | | $463 | | | $528 |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Policy administration services: | | | | | | | |||
Expenses incurred | | | $— | | | $— | | | $71 |
Expenses recovered | | | $— | | | $(12) | | | $(65) |
Years Ended December 31, | |||||||||
(in millions) | | | 2021 | | | 2020 | | | 2019 |
Payment or refund: | | | | | | | |||
Corebridge | | | $1,537 | | | $1,716 | | | $1,191 |
Cap Corp | | | (5) | | | (9) | | | (15) |
Total | | | $1,532 | | | $1,707 | | | $1,176 |
22. | Subsequent Events |
At December 31, 2021 (in millions) | | | Cost(a)(b) | | | Fair Value(b) | | | Amount at which shown in the Balance Sheet |
Fixed maturities: | | | | | | | |||
U.S. government and government sponsored entities | | | $1,406 | | | $1,712 | | | $1,712 |
Obligations of states, municipalities and political subdivisions | | | 7,372 | | | 8,726 | | | 8,726 |
Non-U.S. governments | | | 6,043 | | | 6,415 | | | 6,415 |
Public utilities | | | 19,750 | | | 21,422 | | | 21,422 |
All other corporate debt securities | | | 109,666 | | | 119,641 | | | 119,641 |
Mortgage-backed, asset-backed and collateralized | | | 40,438 | | | 42,734 | | | 42,734 |
Total fixed maturity securities | | | 184,675 | | | 200,650 | | | 200,650 |
Equity securities and mutual funds: | | | | | | | |||
Common stock: | | | | | | | |||
Industrial, miscellaneous and all other | | | 231 | | | 231 | | | 231 |
Total common stock | | | 231 | | | 231 | | | 231 |
Preferred stock | | | 10 | | | 10 | | | 10 |
Mutual funds | | | 1 | | | 1 | | | 1 |
Total equity securities and mutual funds | | | 242 | | | 242 | | | 242 |
Mortgage and other loans receivable, net of allowance: | | | | | | | |||
Commercial mortgages | | | 30,528 | | | 31,780 | | | 30,528 |
Residential mortgages | | | 4,672 | | | 4,675 | | | 4,672 |
Life insurance policy loans | | | 1,832 | | | 1,817 | | | 1,832 |
Commercial loans, other loans and notes receivable | | | 2,852 | | | 2,872 | | | 2,852 |
Total mortgage and other loans receivable | | | 39,884 | | | 41,144 | | | 39,884 |
Allowance for credit losses | | | (496) | | | — | | | (496) |
Total mortgage and other loans receivable, net of allowance | | | 39,388 | | | 41,144 | | | 39,388 |
Other invested assets(c) | | | 11,183 | | | 10,567 | | | 10,567 |
Short-term investments, at cost (approximates fair value)(d) | | | 5,471 | | | 5,471 | | | 5,471 |
Derivative assets(e)(f) | | | 684 | | | 684 | | | 684 |
Total investments | | | $241,643 | | | $258,758 | | | $257,002 |
(a) | Original cost of fixed maturities is reduced by repayments and adjusted for amortization of premiums or accretion of discounts. |
(b) | The table above includes available for sale securities issued by related parties. This includes RMBS securities which had a fair value of $47 million and an amortized cost of $44 million. Additionally, this includes CLO/ABS securities which had a fair value of $862 million and an amortized cost of $823 million. |
(c) | Includes $11 million of investments in related parties. |
(d) | Includes $1.0 billion of receivables with related parties. |
(e) | Includes $662 million of derivative assets with related parties and excludes $2 million of derivative liabilities with related parties. |
(f) | Excludes $191 million of derivative liabilities. |
December 31, (in millions, except per common share data) | | | 2021 | | | 2020 |
Assets: | | | | | ||
Short-term investments | | | $465 | | | $520 |
Other investments | | | 142 | | | 849 |
Total investments | | | 607 | | | 1,369 |
Cash | | | 2 | | | — |
Due from affiliates - net(a) | | | 1 | | | 4 |
Intercompany tax receivable(a) | | | 25 | | | 68 |
Deferred income taxes | | | 3,999 | | | 3,061 |
Investment in consolidated subsidiaries(a) | | | 34,840 | | | 35,397 |
Other assets(b) | | | 43 | | | 186 |
Total assets | | | $39,517 | | | $40,085 |
Liabilities: | | | | | ||
Due to affiliate(a) | | | $58 | | | $57 |
Deferred tax liabilities | | | 3,858 | | | 2,704 |
Short-term debt | | | 8,317 | | | — |
Other liabilities | | | 198 | | | 92 |
Total liabilities | | | 12,431 | | | 2,853 |
Corebridge Shareholders’ equity: | | | | | ||
Common stock class A, $1 par value; 180,000 shares authorized; 90,100 shares issued | | | $— | | | $— |
Common stock class B, $1 par value; 20,000 shares authorized; 9,900 shares issued | | | — | | | — |
Additional paid-in capital | | | 8,060 | | | — |
Retained earnings | | | 8,859 | | | — |
Shareholder’s net investment | | | — | | | 22,579 |
Accumulated other comprehensive income | | | 10,167 | | | 14,653 |
Total Corebridge Shareholders’ equity | | | 27,086 | | | 37,232 |
Total liabilities and equity | | | $39,517 | | | $40,085 |
(a) | Eliminated for the consolidated Corebridge financial statements. |
(b) | At December 31, 2021 and 2020, included restricted cash of $0 and $9 million, respectively. |
Years Ended December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Revenues: | | | | | | | |||
Equity in undistributed net income (loss) of consolidated subsidiaries(a) | | | $3,504 | | | $113 | | | $(1,563) |
Dividend income from consolidated subsidiaries(a) | | | 1,893 | | | 422 | | | 1,574 |
Net investment income | | | 365 | | | 235 | | | 191 |
Net realized gains (losses) | | | 62 | | | (3) | | | 13 |
Expenses: | | | | | | | |||
Interest expense | | | 18 | | | 2 | | | — |
Net (gain) loss on sale of divested businesses | | | (2,438) | | | — | | | — |
Other expenses | | | 191 | | | 130 | | | 120 |
Income before income tax expense (benefit) | | | 8,053 | | | 635 | | | 95 |
Income tax expense (benefit) | | | 698 | | | (7) | | | 45 |
Net income attributable to Corebridge Parent | | | 7,355 | | | 642 | | | 50 |
Other comprehensive income (loss) | | | (4,506) | | | 5,324 | | | 6,908 |
Total comprehensive income (loss) attributable to Corebridge Parent | | | $2,849 | | | $5,966 | | | $6,958 |
(a) | Eliminated for the consolidated Corebridge financial statements. |
Years Ended December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Net cash provided by (used in) operating activities | | | $519 | | | $405 | | | $1,543 |
Cash flows from investing activities: | | | | | | | |||
Contributions to subsidiaries | | | — | | | (135) | | | — |
Sales or distributions of: | | | | | | | |||
Available for sale securities | | | 132 | | | 2 | | | (6) |
Other invested assets | | | 232 | | | 187 | | | 65 |
Maturities of fixed maturity securities available for sale | | | 86 | | | 13 | | | 15 |
Principal payments received on mortgage and other loans receivable | | | 61 | | | 59 | | | 62 |
Purchase of: | | | | | | | |||
Other invested assets | | | (23) | | | (7) | | | (11) |
Mortgage and other loans receivable issued | | | (26) | | | (17) | | | (47) |
Net change in short-term investments | | | 54 | | | (191) | | | (102) |
Net cash provided by (used in) investing activities | | | 516 | | | (89) | | | (24) |
Cash flows from financing activities: | | | | | | | |||
Distributions to AIG | | | (1,008) | | | (450) | | | (1,520) |
Distributions to Class B shareholder | | | (34) | | | — | | | — |
Contributions from AIG | | | — | | | 135 | | | — |
Net cash used in financing activities | | | (1,042) | | | (315) | | | (1,520) |
Net increase (decrease) in cash and restricted cash | | | (7) | | | 1 | | | (1) |
Cash and restricted cash at beginning of year | | | 9 | | | 8 | | | 9 |
Cash and restricted cash at end of year | | | $2 | | | $9 | | | $8 |
Years Ended December 31, (in millions) | | | 2021 | | | 2020 | | | 2019 |
Cash | | | $2 | | | $— | | | $— |
Restricted cash included in Other assets | | | — | | | 9 | | | 8 |
Total cash and restricted cash shown in Statements of Cash Flows – Corebridge Parent Company Only | | | $2 | | | $9 | | | $8 |
Cash (paid) received during the period for: | | | | | | | |||
Taxes: | | | | | | | |||
Income tax authorities | | | $32 | | | $39 | | | $60 |
Intercompany non-cash financing and investing activities: | | | | | | | |||
Capital distributions | | | 12,144 | | | — | | | — |
Capital contributions | | | 403 | | | 126 | | | 139 |
Segment (in millions) | | | Deferred Policy Acquisition Costs and Value of Business Acquired | | | Future Policy Benefits | | | Policy and Contract Claims | | | Unearned Premiums |
2021 | | | | | | | | | ||||
Individual Retirement | | | $2,660 | | | $2,904 | | | $30 | | | $— |
Group Retirement | | | 727 | | | 471 | | | 1 | | | — |
Life Insurance | | | 4,644 | | | 16,965 | | | 1,369 | | | 62 |
Institutional Markets | | | 27 | | | 14,194 | | | 59 | | | — |
Corporate and Other | | | — | | | 23,217 | | | 70 | | | 6 |
| | $8,058 | | | $57,751 | | | $1,529 | | | $68 | |
2020 | | | | | | | | | ||||
Individual Retirement | | | $2,427 | | | $2,700 | | | $30 | | | $— |
Group Retirement | | | 560 | | | 503 | | | 1 | | | — |
Life Insurance | | | 4,350 | | | 16,641 | | | 1,222 | | | 50 |
Institutional Markets | | | 26 | | | 11,093 | | | 40 | | | — |
Corporate and Other | | | — | | | 23,723 | | | 66 | | | 7 |
| | $7,363 | | | $54,660 | | | $1,359 | | | $57 |
Segment (in millions) | | | Premiums and Policy Fees | | | Net Investment Income | | | Other Income(a) | | | Benefits(b) | | | Amortization of Deferred Policy Acquisition Costs and Value of Business Acquired | | | Other Operating Expenses |
2021 | | | | | | | | | | | | | ||||||
Individual Retirement | | | $1,152 | | | $4,356 | | | $592 | | | $2,381 | | | $806 | | | $1,049 |
Group Retirement | | | 544 | | | 2,396 | | | 337 | | | 1,227 | | | 67 | | | 722 |
Life Insurance | | | 2,953 | | | 1,614 | | | 110 | | | 3,597 | | | 178 | | | 842 |
Institutional Markets | | | 3,953 | | | 1,134 | | | 2 | | | 4,394 | | | 6 | | | 108 |
Corporate and Other | | | 86 | | | 2,172 | | | 134 | | | — | | | — | | | 385 |
| | $8,688 | | | $11,672 | | | $1,175 | | | $11,599 | | | $1,057 | | | $3,106 | |
2020 | | | | | | | | | | | | | ||||||
Individual Retirement | | | $1,013 | | | $4,154 | | | $577 | | | $2,170 | | | $523 | | | $1,011 |
Group Retirement | | | 462 | | | 2,193 | | | 275 | | | 1,200 | | | 7 | | | 741 |
Life Insurance | | | 2,909 | | | 1,520 | | | 96 | | | 3,593 | | | 8 | | | 764 |
Institutional Markets | | | 2,757 | | | 917 | | | 2 | | | 3,167 | | | 5 | | | 117 |
Corporate and Other | | | 74 | | | 1,732 | | | 122 | | | — | | | — | | | 314 |
| | $7,215 | | | $10,516 | | | $1,072 | | | $10,130 | | | $543 | | | $2,947 | |
2019 | | | | | | | | | | | | | ||||||
Individual Retirement | | | $914 | | | $4,342 | | | $606 | | | $2,145 | | | $454 | | | $1,016 |
Group Retirement | | | 445 | | | 2,269 | | | 261 | | | 1,215 | | | 81 | | | 682 |
Life Insurance | | | 2,941 | | | 1,494 | | | 87 | | | 3,081 | | | 134 | | | 764 |
Institutional Markets | | | 2,072 | | | 884 | | | 1 | | | 2,509 | | | 5 | | | 101 |
Corporate and Other | | | 59 | | | 1,785 | | | 114 | | | (1) | | | — | | | 298 |
| | $6,431 | | | $10,774 | | | $1,069 | | | $8,949 | | | $674 | | | $2,861 |
(a) | Other income represents advisory fee income and other income balances. |
(b) | Benefits represents policyholder benefits and interest credited to policyholder account balances. |
(in millions) | | | Gross Amount | | | Ceded to Other Companies | | | Assumed from Other Companies | | | Net Amount | | | Percent of Amount Assumed to Net |
2021 | | | | | | | | | | | |||||
Life insurance in force | | | $1,280,090 | | | $363,008 | | | $192 | | | $917,274 | | | —% |
Premiums Earned: | | | | | | | | | | | |||||
Life Insurance and Annuities | | | $4,504 | | | 1,196 | | | 2,265 | | | 5,573 | | | 40.6% |
Accident and Health | | | 100 | | | 36 | | | — | | | 64 | | | — |
Total | | | $4,604 | | | 1,232 | | | 2,265 | | | 5,637 | | | 40.2% |
2020 | | | | | | | | | | | |||||
Life insurance in force | | | $1,243,389 | | | $349,453 | | | $225 | | | $894,161 | | | —% |
Premiums Earned: | | | | | | | | | | | |||||
Life Insurance and Annuities | | | $4,273 | | | 1,072 | | | 1,073 | | | 4,274 | | | 25.1% |
Accident and Health | | | 111 | | | 44 | | | — | | | 67 | | | — |
Total | | | $4,384 | | | 1,116 | | | 1,073 | | | 4,341 | | | 24.7% |
2019 | | | | | | | | | | | |||||
Life insurance in force | | | $1,185,771 | | | $322,890 | | | $279 | | | $863,160 | | | —% |
Premiums Earned: | | | | | | | | | | | |||||
Life Insurance and Annuities | | | $4,234 | | | 1,048 | | | 232 | | | 3,418 | | | 6.8% |
Accident and Health | | | 136 | | | 53 | | | — | | | 83 | | | — |
Total | | | $4,370 | | | $1,101 | | | $232 | | | $3,501 | | | 6.6% |
J.P. Morgan | | | Morgan Stanley | | | Piper Sandler |
Item 13. | Other Expenses of Issuance and Distribution. |
SEC Registration Fee | | | $ |
FINRA Filing Fee | | | |
Listing Fee | | | |
Printing Fees and Expenses | | | |
Accounting Fees and Expenses | | | |
Legal Fees and Expenses | | | |
Blue Sky Fees and Expenses | | | |
Transfer Agent Fees and Expenses | | | |
Miscellaneous | | | |
Total | | | $ |
Item 14. | Indemnification of Directors and Officers. |
• | any breach of the director’s duty of loyalty; |
• | acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; |
• | unlawful payments of dividends or unlawful stock purchases, redemptions or other distributions; or |
• | any transaction from which the director derives an improper personal benefit. |
Item 15. | Recent Sales of Unregistered Securities. |
Item 16. | Exhibits and Financial Statement Schedules. |
Item 17. | Undertakings. |
(a) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. |
(b) | The undersigned registrant hereby undertakes that: |
(1) | For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
(2) | For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
Exhibit Number | | | Exhibit Description | | ||
1.1# | | | Form of Underwriting Agreement. | | ||
3.1# | | | Form of Amended and Restated Certificate of Incorporation of Corebridge Financial, Inc. | | ||
3.2# | | | Form of Amended and Restated Bylaws of Corebridge Financial, Inc. | | ||
4.1# | | | Form of Common Stock Certificate. | | ||
| | Indenture, dated April 5, 2022, between Corebridge and The Bank of New York Mellon, as Trustee. | | | ||
| | First Supplemental Indenture, dated April 5, 2022, between Corebridge and The Bank of New York Mellon, as Trustee, relating to the 2025 Notes. | | | ||
| | Second Supplemental Indenture, dated April 5, 2022, between Corebridge and The Bank of New York Mellon, as Trustee, relating to the 2027 Notes. | | | ||
| | Third Supplemental Indenture, dated April 5, 2022, between Corebridge and The Bank of New York Mellon, as Trustee, relating to the 2029 Notes. | | | ||
| | Fourth Supplemental Indenture, dated April 5, 2022, between Corebridge and The Bank of New York Mellon, as Trustee, relating to the 2032 Notes. | | | ||
| | Fifth Supplemental Indenture, dated April 5, 2022, between Corebridge and The Bank of New York Mellon, as Trustee, relating to the 2042 Notes. | | | ||
| | Sixth Supplemental Indenture, dated April 5, 2022, between Corebridge and The Bank of New York Mellon, as Trustee, relating to the 2052 Notes. | | | ||
5.1# | | | Opinion of Debevoise & Plimpton LLP. | | ||
| | Stockholders’ Agreement, dated as of November 2, 2021, between Corebridge Financial, Inc. and Argon Holdco LLC (a wholly owned subsidiary of Blackstone Inc.). | | |||
| | Stock Purchase Agreement, dated as of July 14, 2021, between American International Group, Inc. and Argon Holdco LLC (a wholly owned subsidiary of Blackstone Inc.). | | |||
10.3# | | | Form of Separation Agreement, dated as of , between Corebridge Financial, Inc. and American International Group, Inc. | | ||
10.4# | | | Trademark License Agreement, dated as of , between Corebridge Financial, Inc. and American International Group, Inc. | | ||
10.5# | | | Form of Registration Rights Agreement, dated as of , between Corebridge Financial, Inc. and American International Group, Inc. | | ||
10.6# | | | Form of Transition Services Agreement, dated as of , between Corebridge Financial, Inc. and American International Group, Inc. | | ||
| | Commitment Letter, dated as of November 2, 2021, between Blackstone ISG-I Advisors L.L.C. and Corebridge Financial, Inc. | | |||
| | Separately Managed Account Agreement, dated as of November 2, 2021, between Blackstone ISG-I Advisors L.L.C. and American General Life Insurance Company. | | |||
| | Separately Managed Account Agreement, dated as of November 2, 2021, between Blackstone ISG-I Advisors L.L.C. and The Variable Annuity Life Insurance Company. | |
Exhibit Number | | | Exhibit Description |
| | Separately Managed Account Agreement, dated as of November 2, 2021, between Blackstone ISG-I Advisors L.L.C. and AGC Life Insurance Company. | |
| | Separately Managed Account Agreement, dated as of November 2, 2021, between Blackstone ISG-I Advisors L.L.C. and AIG Life of Bermuda, Ltd. | |
| | Separately Managed Account Agreement, dated as of November 2, 2021, between Blackstone ISG-I Advisors L.L.C. and AIG Life Ltd. | |
| | Amended and Restated Combination Coinsurance and Modified Coinsurance Agreement, dated as of June 2, 2020 between Fortitude Reinsurance Company, Ltd. and American General Life Insurance Company. | |
| | Amended and Restated Combination Coinsurance and Modified Coinsurance Agreement, dated as of June 2, 2020, between Fortitude Reinsurance Company, Ltd. and The Variable Annuity Life Insurance Company. | |
| | Amended and Restated Modified Coinsurance Agreement, dated as of June 2, 2020, between Fortitude Reinsurance Company, Ltd. and The United States Life Insurance Company In The City of New York. | |
10.16#† | | | Equity Incentive Plan Documents. |
10.17# | | | Tax Matters Agreement dated as of , between Corebridge Financial, Inc. and American International Group, Inc. |
| | Senior Promissory Note dated as of November 1, 2021, by American International Group, Inc., as payee, and Corebridge Financial, Inc., as maker. | |
| | 18-Month Delayed Draw Term Loan Agreement, dated as of February 25, 2022, among Corebridge Financial, Inc., as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. | |
| | Three-Year Delayed Draw Term Loan Agreement, dated as of February 25, 2022, among Corebridge Financial, Inc., as borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. | |
21.1# | | | List of Subsidiaries of Corebridge Financial, Inc., as of . |
| | Consent of PricewaterhouseCoopers LLP. | |
23.2# | | | Consent of Debevoise & Plimpton LLP (included in Exhibit 5.1 hereto). |
| | Consent of Oliver Wyman Actuarial Consulting, Inc. | |
| | Powers of Attorney (contained on signature pages to the Registration Statement on Form S-1). | |
| | Consent of Alan Colberg to be named as a director nominee. | |
| | Consent of Patricia Walsh to be named as a director nominee. | |
| | Filing Fee Table |
* | Previously filed on March 28, 2022. |
** | Filed herewith. |
† | Identifies each management contract or compensatory plan or arrangement. |
# | To be filed by amendment. |
| | COREBRIDGE FINANCIAL, INC. | ||||
| | | | |||
| | By: | | | /s/ Kevin Hogan | |
| | | | Name: Kevin Hogan | ||
| | | | Title: Chief Executive Officer |
Signature | | | Title | | | Date |
| | | | |||
/s/ Kevin Hogan | | | Chief Executive Officer, President and Director (Principal Executive Officer) | | | May 2, 2022 |
Kevin Hogan | | | ||||
| | | | |||
* | | | Chief Financial Officer and Executive Vice President (Principal Financial Officer) | | | May 2, 2022 |
Elias Habayeb | | | ||||
| | | | |||
* | | | Controller (Principal Accounting Officer) | | | May 2, 2022 |
Christopher Filiaggi | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Peter Zaffino | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Adam Burk | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Lucy Fato | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Shane Fitzsimons | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Jonathan Gray | | | | | ||
| | | | |||
/s/ Marilyn Hirsch | | | Director | | | May 2, 2022 |
Marilyn Hirsch | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Christopher Lynch | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Mark Lyons | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Elaine Rocha | | | | | ||
| | | | |||
* | | | Director | | | May 2, 2022 |
Amy Schioldager | | | | |
*By: | | | /s/ Christina Banthin | | | |
| | as Attorney-in-Fact | | |
Exhibit 4.2
Execution Version
COREBRIDGE FINANCIAL, INC.
AND
THE BANK OF NEW YORK MELLON
TRUSTEE
INDENTURE
DATED AS OF April 5, 2022
PROVIDING FOR THE ISSUANCE OF DEBT SECURITIES IN SERIES
Certain Sections of this Indenture relating
to Sections 310 through 318,
inclusive, of the Trust Indenture Act of 1939:
TRUST INDENTURE ACT SECTION |
INDENTURE SECTION |
|
§ 310(a)(1) | 6.09 | |
(a)(2) | 6.09 | |
(a)(3) | Not Applicable | |
(a)(4) | Not Applicable | |
(b) | 6.08 | |
6.10 | ||
§311(a) | 6.13 | |
(b) | 6.13 | |
§ 312(a) | 7.01 | |
7.02 | ||
(b) | 7.02 | |
(c) | 7.02 | |
§ 313(a) | 7.03 | |
(b) | 7.03 | |
(c) | 7.03 | |
(d) | 7.03 | |
§ 314(a) | 7.04 | |
(a)(4) | 1.01 | |
10.04 | ||
(b) | Not Applicable | |
(c)(1) | 1.02 | |
(c)(2) | 1.02 | |
(c)(3) | Not Applicable | |
(d) | Not Applicable | |
(e) | 1.02 | |
§ 315(a) | 6.01 | |
(b) | 6.02 | |
(c) | 6.01 | |
(d) | 6.01 | |
(e) | 5.14 | |
§ 316(a) | 1.01 | |
(a)(1)(A) | 5.02 | |
5.12 | ||
(a)(1)(B) | 5.13 | |
(a)(2) | Not Applicable | |
(b) | 5.08 | |
(c) | 1.04 | |
§ 317(a)(1) | 5.03 | |
(a)(2) | 5.04 | |
(b) | 10.03 | |
§ 318(a) | 1.07 |
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture.
TABLE OF CONTENTS
PAGE | ||
Article I | ||
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION | ||
Section 1.01 | Definitions | 1 |
Section 1.02 | Compliance Certificates and Opinions | 9 |
Section 1.03 | Form of Documents Delivered to Trustee | 10 |
Section 1.04 | Acts of Holders; Record Dates | 10 |
Section 1.05 | Notices, Etc., to Trustee and Company | 12 |
Section 1.06 | Notice to Holders; Waiver | 13 |
Section 1.07 | Conflict with Trust Indenture Act | 14 |
Section 1.08 | Effect of Headings and Table of Contents | 14 |
Section 1.09 | Successors and Assigns | 14 |
Section 1.10 | Separability Clause | 14 |
Section 1.11 | Benefits of Indenture | 15 |
Section 1.12 | Governing Law | 15 |
Section 1.13 | Legal Holidays | 15 |
Section 1.14 | Submission to Jurisdiction | 15 |
Section 1.15 | Waiver of Jury Trial | 15 |
Section 1.16 | Force Majeure | 16 |
Section 1.17 | Foreign Account Tax Compliance Act | 16 |
Article II | ||
SECURITY FORMS | ||
Section 2.01 | Forms Generally | 16 |
Section 2.02 | Form of Face of Security | 17 |
Section 2.03 | Form of Reverse of Security | 19 |
Section 2.04 | Form of Legend for Global Securities | 22 |
Section 2.05 | Form of Trustee’s Certificate of Authentication | 23 |
Article III | ||
THE SECURITIES | ||
Section 3.01 | Amount Unlimited; Issuable in Series | 23 |
Section 3.02 | Denominations | 27 |
Section 3.03 | Execution, Authentication, Delivery and Dating | 27 |
Section 3.04 | Temporary Securities | 29 |
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Section 3.05 | Registration, Registration of Transfer and Exchange | 29 |
Section 3.06 | Mutilated, Destroyed, Lost and Stolen Securities | 32 |
Section 3.07 | Payment of Interest; Interest Rights Preserved | 32 |
Section 3.08 | Persons Deemed Owners | 34 |
Section 3.09 | Cancellation | 34 |
Section 3.10 | Computation of Interest | 34 |
Section 3.11 | CUSIP Numbers | 34 |
Section 3.12 | Original Issue Discount | 35 |
Article IV | ||
SATISFACTION AND DISCHARGE | ||
Section 4.01 | Satisfaction and Discharge of Indenture | 35 |
Section 4.02 | Application of Trust Money | 36 |
Article V | ||
REMEDIES | ||
Section 5.01 | Events of Default | 36 |
Section 5.02 | Acceleration of Maturity; Rescission and Annulment | 38 |
Section 5.03 | Collection of Indebtedness and Suits for Enforcement by Trustee | 39 |
Section 5.04 | Trustee May File Proofs of Claim | 40 |
Section 5.05 | Trustee May Enforce Claims Without Possession of Securities | 40 |
Section 5.06 | Application of Money Collected | 40 |
Section 5.07 | Limitation on Suits | 41 |
Section 5.08 | Unconditional Right of Holders to Receive Principal, Premium and Interest | 42 |
Section 5.09 | Restoration of Rights and Remedies | 42 |
Section 5.10 | Rights and Remedies Cumulative | 42 |
Section 5.11 | Delay or Omission Not Waiver | 42 |
Section 5.12 | Control by Holders | 42 |
Section 5.13 | Waiver of Past Defaults | 43 |
Section 5.14 | Undertaking for Costs | 43 |
Section 5.15 | Waiver of Usury, Stay or Extension Laws | 43 |
Article VI | ||
THE TRUSTEE | ||
Section 6.01 | Certain Duties and Responsibilities | 44 |
Section 6.02 | Notice of Defaults | 45 |
Section 6.03 | Certain Rights of Trustee | 45 |
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Section 6.04 | Not Responsible for Recitals or Issuance of Securities | 47 |
Section 6.05 | May Hold Securities | 47 |
Section 6.06 | Money Held in Trust | 47 |
Section 6.07 | Compensation and Reimbursement | 48 |
Section 6.08 | Conflicting Interests | 49 |
Section 6.09 | Corporate Trustee Required; Eligibility | 49 |
Section 6.10 | Resignation and Removal; Appointment of Successor | 49 |
Section 6.11 | Acceptance of Appointment by Successor | 51 |
Section 6.12 | Merger, Conversion, Consolidation or Succession to Business | 52 |
Section 6.13 | Preferential Collection of Claims Against Company | 52 |
Article VII | ||
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY | ||
Section 7.01 | Company to Furnish Trustee Names and Addresses of Holders | 53 |
Section 7.02 | Preservation of Information; Communications to Holders | 53 |
Section 7.03 | Reports by Trustee | 54 |
Section 7.04 | Reports by Company | 54 |
Article VIII | ||
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE | ||
Section 8.01 | Company May Consolidate, Etc., Only on Certain Terms | 54 |
Section 8.02 | Successor Substituted | 55 |
Article IX | ||
SUPPLEMENTAL INDENTURES | ||
Section 9.01 | Supplemental Indentures Without Consent of Holders | 55 |
Section 9.02 | Supplemental Indentures With Consent of Holders | 57 |
Section 9.03 | Execution of Supplemental Indentures | 58 |
Section 9.04 | Effect of Supplemental Indentures | 59 |
Section 9.05 | Conformity with Trust Indenture Act | 59 |
Section 9.06 | Reference in Securities to Supplemental Indentures | 59 |
Article X | ||
COVENANTS | ||
Section 10.01 | Payment of Principal, Premium and Interest | 59 |
Section 10.02 | Maintenance of Office or Agency | 59 |
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Section 10.03 | Money for Securities Payments to Be Held in Trust | 60 |
Section 10.04 | Statement by Officers as to Default | 61 |
Section 10.05 | Existence | 61 |
Section 10.06 | Limitation on Liens on Voting Stock of Designated Subsidiaries | 61 |
Section 10.07 | Limitations on Disposition of Stock of Certain Subsidiaries | 62 |
Section 10.08 | Waiver of Certain Covenants | 62 |
Article XI | ||
REDEMPTION OF SECURITIES | ||
Section 11.01 | Applicability of Article | 63 |
Section 11.02 | Election to Redeem; Notice to Trustee | 63 |
Section 11.03 | Selection of Securities to Be Redeemed | 63 |
Section 11.04 | Notice of Redemption | 64 |
Section 11.05 | Deposit of Redemption Price | 65 |
Section 11.06 | Securities Payable on Redemption Date | 65 |
Section 11.07 | Securities Redeemed in Part | 65 |
Article XII | ||
SINKING FUNDS | ||
Section 12.01 | Applicability of Article | 66 |
Section 12.02 | Satisfaction of Sinking Fund Payments with Securities | 66 |
Section 12.03 | Redemption of Securities for Sinking Fund | 66 |
Article XIII | ||
DEFEASANCE AND COVENANT DEFEASANCE | ||
Section 13.01 | Company’s Option to Effect Defeasance or Covenant Defeasance | 67 |
Section 13.02 | Defeasance and Discharge | 67 |
Section 13.03 | Covenant Defeasance | 68 |
Section 13.04 | Conditions to Defeasance or Covenant Defeasance | 68 |
Section 13.05 | Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions | 70 |
Section 13.06 | Reinstatement | 71 |
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INDENTURE, dated as of April 5, 2022, between Corebridge Financial, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), having its principal office at 2919 Allen Parkway, Woodson Tower, Houston, Texas 77019, and The Bank of New York Mellon, a New York banking corporation, as Trustee (together with its successors and assigns in such capacity, the “Trustee”).
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured debt securities, debentures, notes, bonds or other evidences of indebtedness (herein called the “Securities”), in an unlimited aggregate principal amount to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows:
Article
I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01 Definitions .
For all purposes of this Indenture or any indenture supplemental hereto, except as otherwise expressly provided in this Indenture or in any indenture supplemental hereto, or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America, and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation;
(4) unless the context otherwise requires, any reference to an “Article” or a “Section” refers to an Article or a Section, as the case may be, of this Indenture; and
(5) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision.
“Act”, when used with respect to any Holder, has the meaning specified in Section 1.04.
“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling,” “controlled” and “under common control with” have meanings correlative to the foregoing.
“AGL” means American General Life Insurance Company, a Texas Life Insurance Company.
“Applicable Law” has the meaning specified in Section 1.17.
“Authorized Officers” has the meaning specified in Section 1.05.
“Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board.
“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.
“Business Day”, when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law or executive order to close.
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“Capital Stock” of any Person means any and all shares or units of, rights to purchase, warrants or options for, or other equivalent interests in equity of such Person, including Preferred Stock.
“Code” has the meaning specified in Section 1.17.
“Commission” means the Securities and Exchange Commission, from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time.
“Company” means the Person named as the “Company” in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Company” shall mean such successor Person.
“Company Request” or “Company Order” means a written request or order signed in the name of the Company by its Chief Executive Officer, the President, any Executive Vice President or Senior Vice President or any Vice President (or any Person designated by one of them in writing as authorized to execute and deliver Company Requests and Company Orders), and by its Treasurer, one of its Assistant Treasurers, its Secretary or one of its Assistant Secretaries (or any Person designated by one of them in writing as authorized to execute and deliver Company Requests and Company Orders), and delivered to the Trustee.
“Corporate Trust Office” means the principal office of the Trustee in New York, New York at which at any particular time its corporate trust business shall be administered, which office at the date hereof is located at 240 Greenwich Street, Floor 7 East, New York, New York 10286, Attention: Corporate Trust Administration, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).
“corporation” means a corporation, association, company, limited liability company, joint-stock company or business trust.
“Covenant Defeasance” has the meaning specified in Section 13.03.
“Defaulted Interest” has the meaning specified in Section 3.07.
“Defeasance” has the meaning specified in Section 13.02.
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“Depositary” means, with respect to Securities of any series issuable in whole or in part in the form of one or more Global Securities, any Person that is designated to act as Depositary for such Securities as contemplated by Section 3.01.
“Designated Subsidiary” means (i) each of AGL and VALIC, (ii) any successor to all or substantially all of the business of AGL or VALIC that is also a direct or indirect Subsidiary of the Company, or (iii) any Person (other than the Company) having direct or indirect control of AGL and VALIC (or any successor to all or substantially all of the business of AGL and VALIC, that is also a direct or indirect Subsidiary of the Company).
“Electronic Means” means the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder.
“Event of Default” has the meaning specified in Section 5.01.
“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time.
“Expiration Date” has the meaning specified in Section 1.04.
“Global Security” means a Security that evidences all or part of the Securities of any series and bears the legend set forth in Section 2.04 (or such legend as may be specified as contemplated by Section 3.01 for such Securities).
“Holder” means a Person in whose name a Security is registered in the Security Register.
“Indenture” means this instrument as originally executed and as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. The term “Indenture” shall also include the terms of particular series of Securities established as contemplated by Section 3.01.
“Instructions” has the meaning specified in Section 1.05.
“interest”, when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity.
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“Interest Payment Date”, when used with respect to any Security, means the Stated Maturity of an installment of interest on such Security.
“Investment Company Act” means the Investment Company Act of 1940 and any statute successor thereto, in each case as amended from time to time.
“Maturity”, when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise.
“Non-Recourse Indebtedness” means indebtedness (a) as to which neither the Company nor any of its Subsidiaries (i) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute indebtedness) or (ii) is directly or indirectly liable as a primary obligor, secondary obligor, guarantor or otherwise and (b) the incurrence of which will not result in any recourse against any of the assets of the Company or its Subsidiaries.
“Notice of Default” means a written notice of the kind specified in Section 5.01(4).
“Officers’ Certificate” means a certificate signed by the Chief Executive Officer, the President, any Executive Vice President or Senior Vice President or any Vice President, and by the Treasurer, an Assistant Treasurer, the Controller or Assistant Controller, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee.
“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company, and who shall be acceptable to the Trustee.
“Original Issue Discount Security” means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.02.
“Outstanding”, when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except:
(1) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation;
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(2) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to Section 13.02; and
(4) Securities which have been paid pursuant to Section 3.06 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given, made or taken any request, demand, authorization, direction, notice, consent, waiver or other action hereunder as of any date, (A) the principal amount of an Original Issue Discount Security which shall be deemed to be Outstanding shall be the amount of the principal thereof which would be due and payable as of such date upon acceleration of the Maturity thereof to such date pursuant to Section 5.02, (B) if, as of such date, the principal amount payable at the Stated Maturity of a Security is not determinable, the principal amount of such Security which shall be deemed to be Outstanding shall be the amount as specified or determined as contemplated by Section 3.01, (C) the principal amount of a Security denominated in one or more foreign currencies or currency units which shall be deemed to be Outstanding shall be the U.S. dollar equivalent, determined as of such date in the manner provided as contemplated by Section 3.01, of the principal amount of such Security (or, in the case of a Security described in Clause (A) or (B) above, of the amount determined as provided in such Clause), and (D) Securities owned by the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent, waiver or other action, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Securities and that the pledgee is not the Company or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor.
“Paying Agent” means any Person authorized by the Company to pay the principal of or any premium or interest on any Securities on behalf of the Company.
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“Person” means any individual, corporation, partnership, limited liability company, association, joint-stock company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Place of Payment”, when used with respect to the Securities of any series, means the place or places where the principal of and any premium and interest on the Securities of that series are payable as specified as contemplated by Section 3.01 or, if not so specified, New York, New York.
“Predecessor Security” of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.06 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security.
“Preferred Stock”, as applied to the Capital Stock of any corporation or company, means Capital Stock of any class or classes (however designated) that by its terms is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation or company, over Capital Stock of any other class of such corporation or company.
“Redemption Date”, when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture.
“Redemption Price”, when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture.
“Regular Record Date” for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 3.01.
“Responsible Officer” when used with respect to the Trustee, means any officer within the corporate trust department of the Trustee, including any vice president, any assistant vice president, any assistant secretary, any senior associate, any associate, any trust officer or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture.
“Restricted Indebtedness” means indebtedness for borrowed money (other than Non-Recourse Indebtedness) which is secured by a mortgage, pledge, lien, security interest or other encumbrance of any nature on any of the present or future Voting Stock of a Designated Subsidiary.
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“Restricted Stock” means shares of Capital Stock of a Designated Subsidiary (other than Preferred Stock of a Designated Subsidiary having no voting rights of any kind).
“Securities” has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture.
“Securities Act” means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time.
“Security Register” and “Security Registrar” have the respective meanings specified in Section 3.05.
“Special Record Date” for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 3.07.
“Stated Maturity”, when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable.
“Subsidiary” means a corporation, partnership, limited liability company or trust more than 50% of the outstanding Voting Stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries.
“Trust Indenture Act” means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, “Trust Indenture Act” means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended.
“Trustee” means the Person named as the “Trustee” in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, “Trustee” as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series.
“U.S. Government Obligation” has the meaning specified in Section 13.04.
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“VALIC” means The Variable Annuity Life Insurance Company, a Texas insurance company.
“Vice President”, when used with respect to the Company or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title “vice president”.
“Voting Stock” means stock or other interests evidencing ownership in a corporation, limited liability company, partnership or trust which ordinarily has voting power for the election of directors, or persons performing equivalent functions, whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency.
Section 1.02 Compliance Certificates and Opinions .
Upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee such certificates and opinions as may be required under the Trust Indenture Act. Each such certificate or opinion shall be given in the form of an Officers’ Certificate, if to be given by an officer of the Company, or an Opinion of Counsel, if to be given by counsel, and shall comply with the requirements of the Trust Indenture Act and any other requirements set forth in this Indenture.
Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (except for certificates provided for in Section 10.04) shall include,
(1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, such individual has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.
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Section 1.03 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.
Section 1.04 Acts of Holders; Record Dates.
Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.
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The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Security.
The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given, made or taken by Holders of Securities of such series, provided that the Company may not set a record date for, and the provisions of this paragraph shall not apply with respect to, the giving or making of any notice, declaration, request or direction referred to in the next paragraph. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of the relevant series on such record date, and no other Holders, shall be entitled to take the relevant action, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Trustee in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.06.
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The Trustee may set any day as a record date for the purpose of determining the Holders of Outstanding Securities of any series entitled to join in the giving or making of (i) any Notice of Default, (ii) any declaration of acceleration referred to in Section 5.02, (iii) any request to institute proceedings referred to in Section 5.07(2) or (iv) any direction referred to in Section 5.12, in each case with respect to Securities of such series. If any record date is set pursuant to this paragraph, the Holders of Outstanding Securities of such series on such record date, and no other Holders, shall be entitled to join in such notice, declaration, request or direction, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite principal amount of Outstanding Securities of such series on such record date. Nothing in this paragraph shall be construed to prevent the Trustee from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite principal amount of Outstanding Securities of the relevant series on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Trustee, at the Company’s expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Company in writing and to each Holder of Securities of the relevant series in the manner set forth in Section 1.06.
With respect to any record date set pursuant to this Section, the party hereto which sets such record dates may designate any day as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the other party hereto in writing, and to each Holder of Securities of the relevant series in the manner set forth in Section 1.06, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the party hereto which set such record date shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.
Without limiting the foregoing, a Holder entitled hereunder to take any action hereunder with regard to any particular Security may do so with regard to all or any part of the principal amount of such Security or by one or more duly appointed agents each of which may do so pursuant to such appointment with regard to all or any part of such principal amount.
Section 1.05 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office; or
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(2) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument, Attention Secretary, or at any other address previously furnished in writing to the Trustee by the Company.
The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Indenture and delivered using Electronic Means; provided, however, that the Company shall provide to the Trustee an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the Company whenever a person is to be added or deleted from the listing. The Company understands and agrees that the Trustee cannot determine the identity of the actual sender of such Instructions and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The Company shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the Company and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the Company. The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The Company agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the Company; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
Section 1.06 Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his or her address as it appears in the Security Register, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.
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In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder.
Notwithstanding any other provision of this Indenture or any Security, where this Indenture or any Security provides for notice of any event or any other communication (including any notice of redemption or repurchase) to a Holder of a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the standing instructions from the Depositary or its designee, including by electronic mail in accordance with accepted practices at the Depositary.
Section 1.07 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act which is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act which may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be.
Section 1.08 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.
Section 1.09 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
Section 1.10 Separability Clause.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
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Section 1.11 Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.12 Governing Law.
This Indenture and the Securities shall be governed by and construed in accordance with the law of the State of New York.
Section 1.13 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture or of the Securities (other than a provision of any Security which specifically states that such provision shall apply in lieu of this Section)) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity; provided, however, that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to the date of such payment.
Section 1.14 Submission to Jurisdiction .
The Company hereby irrevocably submits to the jurisdiction of any New York State court sitting in the Borough of Manhattan in the City of New York or any federal court sitting in the Southern District in the Borough of Manhattan in the City of New York in respect of any suit, action or proceeding arising out of or relating to this Indenture and the Notes, and irrevocably accepts for itself and in respect of its property, generally and unconditionally, jurisdiction of the aforesaid courts.
Section 1.15 Waiver of Jury Trial .
Each of the Company, the Holders and the Trustee hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Indenture, the Notes or the transaction contemplated hereby.
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Section 1.16 Force Majeure .
In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, epidemics or pandemics, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.
Section 1.17 Foreign Account Tax Compliance Act .
The Company agrees (i) to provide the Trustee with such reasonable information as it has in its possession to enable the Trustee to determine whether any payments pursuant to this Indenture are subject to the withholding requirements described in Section 1471(b) of the US Internal Revenue Code of 1986 (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code and any regulations, or agreements thereunder or official interpretations thereof (“Applicable Law”), and (ii) that the Trustee shall be entitled to make any withholding or deduction from payments under this Indenture to the extent necessary to comply with Applicable Law, for which the Trustee shall not have any liability.
Article
II
SECURITY FORMS
Section 2.01 Forms Generally.
The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. If the form of Securities of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Company Order contemplated by Section 3.03 for the authentication and delivery of such Securities. If all of the Securities of any series established by action taken pursuant to a Board Resolution are not to be issued at one time, it shall not be necessary to deliver a record of such action at the time of issuance of each Security of such series, but an appropriate record of such action shall be delivered at or before the time of issuance of the first Security of such series.
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The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities.
Section 2.02 Form of Face of Security.
[Insert any legend required by the Internal Revenue Code and the regulations thereunder.]
Corebridge Financial, Inc.
No. ……. | $...... |
Corebridge Financial, Inc., a corporation duly organized and existing under the laws of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to ______________, or registered assigns, the principal sum of ______________________ Dollars on _____________________ [if the Security is to bear interest prior to Maturity, insert — , and to pay interest thereon from _____ or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on _____ and _____ in each year, commencing __________, at the rate of ____% per annum, until the principal hereof is paid or made available for payment [if applicable, insert — , provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of ____% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand]. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the _____ or _____ (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture].
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[If the Security is not to bear interest prior to Maturity, insert — The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of _____% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand.]
Payment of the principal of (and premium, if any) and [if applicable, insert — any such] interest on this Security will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York], in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts [if applicable, insert — ; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual or electronic signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
Corebridge Financial, Inc. | ||
By |
Attest: | |
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Section 2.03 Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and to be issued in one or more series under an Indenture, dated as of ________________ (herein called the “Indenture”, which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [if applicable, insert — ,[initially] limited in aggregate principal amount to $_____][, provided that the Company may, without the consent of any Holder, at any time and from time to time, increase the initial principal amount.]
[If applicable, insert — The Securities of this series are subject to redemption upon not less than 10 days’ notice, [if applicable, insert — (1) on _____ in any year commencing with the year _____ and ending with the year _____ through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [if applicable, insert — on or after _____, ____], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [if applicable, insert — on or before _____, ____%, and if redeemed] during the 12-month period beginning _____ of the years indicated,
Redemption | Redemption | ||
Year | Price | Year | Price |
and thereafter at a Redemption Price equal to _____% of the principal amount, together in the case of any such redemption [if applicable, insert — (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert — The Securities of this series are subject to redemption upon not less than 10 days’ notice, (1) on __________ in any year commencing with the year _____ and ending with the year _____ through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [if applicable, insert — on or after __________], as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning __________ of the years indicated,
Year | Redemption Price For Redemption Through Operation Sinking Fund |
Redemption Price For Redemption Otherwise Than Through Operation of the Sinking Fund |
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and thereafter at a Redemption Price equal to _____% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.]
[If applicable, insert — Notwithstanding the foregoing, the Company may not, prior to __________, redeem any Securities of this series as contemplated by [if applicable, insert — Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than _____% per annum.]
[If applicable, insert — The sinking fund for this series provides for the redemption on _____ in each year beginning with the year _____ and ending with the year _____ of [if applicable, insert — not less than $_____ (“mandatory sinking fund”) and not more than] $_____ aggregate principal amount of Securities of this series. Securities of this series acquired or redeemed by the Company otherwise than through [if applicable, insert — mandatory] sinking fund payments may be credited against subsequent [if applicable, insert — mandatory] sinking fund payments otherwise required to be made [if applicable, insert — , in the inverse order in which they become due].]
[If the Security is subject to redemption of any kind, insert — In the event of redemption of this Security in part only, a new Security or Securities of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert — The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security] [or] [certain restrictive covenants and Events of Default with respect to this Security] in each case] upon compliance with certain conditions set forth in the Indenture.]
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[If the Security is not an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.]
[If the Security is an Original Issue Discount Security, insert — If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to — insert formula for determining the amount. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.
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No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form without coupons in denominations of $_____ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture.
Section 2.04 Form of Legend for Global Securities.
Unless otherwise specified as contemplated by Section 3.01 for the Securities evidenced thereby, every Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form:
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THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Section 2.05 Form of Trustee’s Certificate of Authentication.
The Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture.
Dated: | The Bank of New York Mellon_______ | |
As Trustee | ||
By | ||
Authorized Signatory |
Article
III
THE SECURITIES
Section 3.01 Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution and, subject to Section 3.03, set forth, or determined in the manner provided, in an Officers’ Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series);
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(2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07 or 12.03 and except for any Securities which, pursuant to Section 3.03, are deemed never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest;
(4) the date or dates on which the principal of any Securities of the series is payable;
(5) the rate or rates at which any Securities of the series shall bear interest, if any, the manner of calculation, the date or dates from which any such interest shall accrue, the Interest Payment Dates on which any such interest shall be payable and the Regular Record Date for any such interest payable on any Interest Payment Date;
(6) the place or places where the principal of and any premium and interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which and the terms and conditions upon which (including the notice period, if different from the notice period set forth in Section 11.04) any Securities of the series may be redeemed, in whole or in part, at the option of the Company and, if other than by a Board Resolution, the manner in which any election by the Company to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company to redeem or purchase any Securities of the series pursuant to any sinking fund or analogous provisions (including payments made in cash in participation of future sinking fund obligations) or at the option of the Holder thereof and the period or periods within which, the price or prices at which and the terms and conditions upon which any Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation;
(9) if other than denominations of $2,000 and any integral multiple of $1,000 in excess thereof, the denominations in which any Securities of the series shall be issuable;
(10) if the amount of principal of or any premium or interest on any Securities of the series may be determined with reference to an index, a financial or economic measure or pursuant to a formula, the manner in which such amounts shall be determined;
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(11) if other than the currency of the United States of America, the currency, currencies or currency units in which the principal of or any premium or interest on any Securities of the series shall be payable and the manner of determining the equivalent thereof in the currency of the United States of America for any purpose, including for purposes of the definition of “Outstanding” in Section 1.01;
(12) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies or currency units other than that or those in which such Securities are stated to be payable, the currency, currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined);
(13) if other than the entire principal amount thereof, the portion of the principal amount of any Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.02;
(14) if the principal amount payable at the Stated Maturity of any Securities of the series will not be determinable as of any one or more dates prior to the Stated Maturity, the amount which shall be deemed to be the principal amount of such Securities as of any such date for any purpose thereunder or hereunder, including the principal amount thereof which shall be due and payable upon any Maturity other than the Stated Maturity or which shall be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined);
(15) if other than by a Board Resolution, the manner in which any election by the Company to defease any Securities of the series pursuant to Section 13.02 or Section 13.03 shall be evidenced; whether any Securities of the series other than Securities denominated in U.S. dollars and bearing interest at a fixed rate are to be subject to Section 13.02 or Section 13.03; or, in the case of Securities denominated in U.S. dollars and bearing interest at a fixed rate, if applicable, that the Securities of the series, in whole or any specified part, shall not be defeasible pursuant to Section 13.02 or Section 13.03 or both such Sections;
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(16) if applicable, that any Securities of the series shall be issuable in whole or in part in the form of one or more Global Securities and, in such case, the respective Depositaries for such Global Securities, the form of any legend or legends which shall be borne by any such Global Security in addition to or in lieu of that set forth in Section 2.04 and any circumstances in addition to or in lieu of those set forth in Clause (2) of Section 3.05 in which any such Global Security may be exchanged in whole or in part for Securities registered, and any transfer of such Global Security in whole or in part may be registered, in the name or names of Persons other than the Depositary for such Global Security or a nominee thereof;
(17) any addition to or change in the Events of Default which applies to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section, 5.02;
(18) any addition to, deletion from or change in the covenants set forth in Article Ten which applies to Securities of the series;
(19) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture, except as permitted by Section 9.01(5));
(20) provisions granting special rights to Holders of the series upon the occurrence of specific events;
(21) whether the Securities of the series will be convertible or exchangeable into shares of common stock or other securities or property of the Company and, if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, including the conversion or exchange price or method of determining the conversion or exchange price and the conversion or exchange period;
(22) any special tax implications of the Securities of the series, including any provisions for Original Issue Discount Securities, if offered;
(23) any change in the right of the Trustee or the requisite Holders to declare the principal amount thereof due and payable pursuant to Section 5.01;
(24) any trustees, authenticating or Paying Agents, transfer agents or registrars, calculation agents or other agents with respect to the Securities of the series; and
(25) any restrictions on the registration, transfer or exchange of the Securities of the series.
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All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution referred to above and (subject to Section 3.03) set forth, or determined in the manner provided, in the Officers’ Certificate referred to above or in any such indenture supplemental hereto. All Securities of any one series need not be issued at one time and, unless otherwise provided in or pursuant to the Board Resolution referred to above and (subject to Section 3.03) set forth, or determined in the manner provided, in the Officers’ Certificate referred to above or in any such indenture supplemental hereto with respect to a series of Securities, additional Securities of a series may be issued, at the option of the Company, without the consent of any Holder, at any time and from time to time. All Securities shall be issued under a separate CUSIP or ISIN number unless the additional Securities are issued pursuant to a “qualified reopening” of the original series, are otherwise treated as part of the same “issue” of debt instruments as the original series or are issued with no more than a de minimis amount of original issue discount, in each case for U.S. federal income tax purposes.
If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and delivered to the Trustee at or prior to the delivery of the Officers’ Certificate setting forth the terms of the series.
Section 3.02 Denominations.
The Securities of each series shall be issuable only in registered form without coupons and only in such denominations as shall be specified as contemplated by Section 3.01. In the absence of any such specified denomination with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $2,000 and any integral multiples of $1,000 in excess thereof.
Section 3.03 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chief Executive Officer, the President, any Executive Vice President or Senior Vice President or one of its Vice Presidents or its Treasurer or one of its Assistant Treasurers or its Secretary or one of its Assistant Secretaries. The signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.
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At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established by or pursuant to one or more Board Resolutions as permitted by Sections 2.01 and 3.01, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 2.01, that such form has been established in conformity with the provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 3.01, that such terms have been established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee’s own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.01 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, including in the event that the size of a series of Outstanding Securities is increased as contemplated by Section 3.01, it shall not be necessary to deliver the Officers’ Certificate otherwise required pursuant to Section 3.01 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the authentication of each Security of such series if such documents are delivered at or prior to the authentication upon original issuance of the first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
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No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual or electronic signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 3.09, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture.
Section 3.04 Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor one or more definitive Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series and tenor.
Section 3.05 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the “Security Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed “Security Registrar” for the purpose of registering Securities and transfers of Securities as herein provided.
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Upon surrender for registration of transfer of any Security of a series at the office or agency of the Company in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series, of any authorized denominations and of like tenor and aggregate principal amount, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.04, 9.06, 11.07 or 12.03 not involving any transfer.
If the Securities of any series (or of any series and specified tenor) are to be redeemed in part, the Company shall not be required (A) to issue, register the transfer of or exchange any Securities of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of the giving of a notice of redemption of any such Securities selected for redemption under Section 11.03 and ending at the close of business on the day such notice was given, or (B) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.
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The provisions of Clauses (1), (2), (3) and (4) below shall apply only to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be registered in the name of the Depositary designated for such Global Security or a nominee thereof and delivered to such Depositary or a nominee thereof or custodian therefor, and each such Global Security shall constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global Security may be exchanged in whole or in part for Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or a nominee thereof unless (A) such Depositary has notified the Company that it is unwilling or unable or no longer permitted under applicable law to continue as Depositary for such Global Security, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Security, (C) the Company so directs the Trustee by a Company Order or (D) there shall exist such circumstances, if any, in addition to or in lieu of the foregoing as have been specified for this purpose as contemplated by Section 3.01.
(3) Subject to Clause (2) above, any exchange of a Global Security for other Securities may be made in whole or in part, and all Securities issued in exchange for a Global Security or any portion thereof shall be registered in such names as the Depositary for such Global Security shall direct.
(4) Every Security authenticated and delivered upon registration of transfer of, or in exchange for or in lieu of, a Global Security or any portion thereof, whether pursuant to this Section, Section 3.04, 3.06, 9.06, 11.07 or 12.03 or otherwise, shall be authenticated and delivered in the form of, and shall be, a Global Security, unless such Security is registered in the name of a Person other than the Depositary for such Global Security or a nominee thereof.
The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among participants in the Depositary or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
The Trustee, Security Registrar and any Paying Agent shall have no responsibility for any actions taken or not taken by the Depositary.
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Section 3.06 Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security has been acquired by a bona fide purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.07 Payment of Interest; Interest Rights Preserved.
Except as otherwise provided as contemplated by Section 3.01 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.
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Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called “Defaulted Interest”) shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be given to each Holder of Securities of such series in the manner set forth in Section 1.06, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security.
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Section 3.08 Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of and any premium and (subject to Section 3.07) any interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.
Section 3.09 Cancellation.
All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of in accordance with its customary procedures.
Section 3.10 Computation of Interest.
Except as otherwise specified as contemplated by Section 3.01 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months.
Section 3.11 CUSIP Numbers.
The Company in issuing any series of the Securities may use CUSIP numbers, if then generally in use, and thereafter with respect to such series, the Trustee may use such numbers in any notice of redemption with respect to such series, provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities of that series or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities of that series, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee in writing of any change in the CUSIP numbers.
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Section 3.12 Original Issue Discount.
If any of the Securities is an Original Issue Discount Security, the Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of original issue discount (including daily rates and accrual periods) accrued on such Outstanding Original Issue Discount Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time.
Article
IV
SATISFACTION AND DISCHARGE
Section 4.01 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when
(1) | either |
(A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been mutilated, destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.06 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.03) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one year, or
(iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company,
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and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose money in an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 6.07 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of this Section, the obligations of the Trustee under Section 4.02 and the last paragraph of Section 10.03 shall survive.
Section 4.02 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03, all money deposited with the Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal and any premium and interest for whose payment such money has been deposited with the Trustee.
Article
V
REMEDIES
Section 5.01 Events of Default.
“Event of Default”, wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of thirty (30) days; or
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(2) default in the payment of the principal of or any premium on any Security of that series at its Maturity, and continuance of such default for a period of five (5) days; or
(3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series, and the continuance of such default for a period of five (5) days; or
(4) default in the performance, or breach, of any covenant or warranty of the Company in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of series of Securities other than that series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Default” hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or
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(7) any other Event of Default provided with respect to Securities of that series.
Section 5.02 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount of all the Securities of that series (or, if any Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified by the terms thereof) to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if
(1) | the Company has paid or deposited with the Trustee a sum sufficient to pay |
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate or rates prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and
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(D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right consequent thereon.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof and such default continues for a period of five days,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal and any premium and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal and premium and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy.
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Section 5.04 Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or any other obligor upon the Securities), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under the Trust Indenture Act in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee shall be authorized to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding; provided, however, that the Trustee may, on behalf of the Holders, vote for the election of a trustee in bankruptcy or similar official and be a member of a creditors’ or other similar committee.
Section 5.05 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered.
Section 5.06 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal or any premium or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.07; and
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SECOND: To the payment of the amounts then due and unpaid for principal of and any premium and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal and any premium and interest, respectively.
Section 5.07 Limitation on Suits.
No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity reasonably satisfactory to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders), or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders.
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Section 5.08 Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and any premium and (subject to Section 3.07) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption or repayment, on the Redemption Date or date for repayment, as the case may be) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder.
Section 5.09 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.
Section 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.06, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be.
Section 5.12 Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with any rule of law or with this Indenture, and
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(2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction.
Section 5.13 Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the Outstanding Securities of any series may on behalf of the Holders of all the Securities of such series waive any past default hereunder with respect to such series and its consequences, except a default
(1) in the payment of the principal of or any premium or interest on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon.
Section 5.14 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of such suit, and may assess reasonable costs against any such party litigant, in the manner and to the extent provided in the Trust Indenture Act; provided that neither this Section nor the Trust Indenture Act shall be deemed to authorize any court to require such an undertaking or to make such an assessment in any suit instituted by the Company. This Section 5.14 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 5.08 hereof, or a suit by Holders of more than 10% in principal amount of the then Outstanding Securities.
Section 5.15 Waiver of Usury, Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
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Article
VI
THE TRUSTEE
Section 6.01 Certain Duties and Responsibilities.
(1) Except during the continuance of an Event of Default:
(A) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and
(B) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).
(2) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.
(3) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(A) this Subsection shall not be construed to limit the effect of Subsection (1) of this Section;
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(B) the Trustee shall not be liable for any error of judgement made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts;
(C) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities of any series, determined as provided in Sections 1.01, 1.04 and 5.12, relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series; and
(D) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(4) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.
Section 6.02 Notice of Defaults.
If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided by the Trust Indenture Act; provided, however, that in the case of any default of the character specified in Section 5.01(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term “default” means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series.
Section 6.03 Certain Rights of Trustee.
Subject to the provisions of Section 6.01:
(1) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;
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(2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order, and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, conclusively rely upon an Officers’ Certificate;
(4) the Trustee may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation;
(7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder;
(8) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder and each agent, custodian and other Person employed to act hereunder;
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(9) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;
(10) in no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;
(11) the Trustee shall not be deemed to have notice of any Default or Event of Default unless written notice of any event which is in fact such a default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and
(12) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.
Section 6.04 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee’s certificates of authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities. The Trustee shall not be accountable for the use or application by the Company of Securities or the proceeds thereof.
Section 6.05 May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company with the same rights it would have if it were not Trustee, Paying Agent, Security Registrar or such other agent.
Section 6.06 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company.
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Section 6.07 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as shall from time to time be agreed to in writing between the Company and the Trustee for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the reasonable expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and its agents for, and to hold them harmless against, any and all loss, damage, claims, liability or expense, including taxes (other than taxes based upon, measured by or determined by the income of the Trustee), arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim (whether asserted by the Company or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, or in connection with enforcing the provisions of this Section, except to the extent that such loss, damage, claim, liability or expense is due to its own negligence or bad faith.
The Trustee shall have a lien prior to the Securities as to all property and funds held by it hereunder for any amount owing it pursuant to this Section 6.07, except with respect to funds held in trust for the benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.01(5) or Section 5.01(6), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this Indenture and the resignation or removal of the Trustee.
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Section 6.08 Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture.
Section 6.09 Corporate Trustee Required; Eligibility.
There shall at all times be one (and only one) Trustee hereunder with respect to the Securities of each series, which may be Trustee hereunder for Securities of one or more other series. Each Trustee shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such and (a) has a combined capital and surplus of at least $50,000,000 or (b) is a wholly-owned subsidiary of a bank holding company having a consolidated capital and surplus of at least $50,000,000. If any such Person publishes reports of condition at least annually, pursuant to law or to the requirements of its supervising or examining authority, then for the purposes of this Section and to the extent permitted by the Trust Indenture Act, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee with respect to the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. The Trustee shall comply with Section 310(b) of the Trust Indenture Act; provided, however, that there shall be excluded from the operation of Section 310(b)(1) of the Trust Indenture Act any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Company are outstanding if the requirements for such exclusion set forth in Section 310(b)(1) of the Trust Indenture Act are met.
Section 6.10 Resignation and Removal; Appointment of Successor.
No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.11.
The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee, at the expense of the Company, may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.11 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the Trustee being removed, at the expense of the Company, may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
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If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 and shall fail to resign after written request therefor by the Company or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by a Board Resolution may remove the Trustee with respect to all Securities, or (B) subject to Section 5.14, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees.
If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 6.11. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.11, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 6.11, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series.
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The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 1.06. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office.
Section 6.11 Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by, such retiring Trustee hereunder.
In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates.
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Upon request of any such successor Trustee, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in the first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article.
Section 6.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion, consolidation or sale to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities.
Section 6.13 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Company (or any such other obligor).
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Article
VII
HOLDERS’ LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.01 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee and the Security Registrar:
(1) on a semi-annual basis not more than 15 days after each Regular Record Date, a list, in such form as the Trustee or the Security Registrar may reasonably require, of the names and addresses of the Holders of Securities as of such Regular Record Date; provided that the Company shall not be obligated to furnish or cause to furnish such list at any time that the list shall not differ in any respect from the most recent list furnished to the Trustee and the Security Registrar by the Company; and
(2) at such other times as the Trustee or the Security Registrar may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished;
provided, however that, in either case, no such list need be furnished for any series for which the Trustee shall be the Security Registrar.
Section 7.02 Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.01 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.01 upon receipt of a new list so furnished.
The rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act.
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Section 7.03 Reports by Trustee.
The Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within sixty days after each May 15 following the date of the initial issuance of Securities under this Indenture deliver to Holders a brief report, dated as of such May 15, which complies with the provisions of such Section 313(a).
A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which any Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when any Securities are listed on any stock exchange and of any delisting thereof.
Section 7.04 Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports as may be required by the Trust Indenture Act.
Delivery of such reports, information and documents to the Trustee is for informational purposes only and shall not constitute a representation or warranty as to the accuracy or completeness of the reports, information or documents. The Trustee’s receipt of such shall not constitute actual or constructive notice or knowledge of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to conclusively rely exclusively on Officers’ Certificates).
Article
VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.01 Company May Consolidate, Etc., Only on Certain Terms.
Except in relation to the direct or indirect conveyance or transfer of all or any portion of the capital stock, assets or liabilities of any of the Company’s direct or indirect wholly-owned subsidiaries to the Company or any of the Company’s wholly-owned subsidiaries or the consolidation or merger of any of the Company’s direct or indirect wholly-owned subsidiaries with and into the Company, the Company shall not consolidate with or merge into any other Person or sell, convey, lease or otherwise transfer all or substantially all of its assets to any Person, unless:
(1) in case the Company shall consolidate with or merge into another Person or sell, convey, lease or otherwise transfer all or substantially all of its assets to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, limited liability company, partnership or trust, shall be organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed;
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(2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with.
Section 8.02 Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company into, any other Person or any sale conveyance, lease or other transfer of all or substantially all of the assets of the Company in accordance with Section 8.01, the successor Person formed by such consolidation or into which the Company is merged or to which such sale, conveyance, lease or other transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall not be relieved of all obligations and covenants under this Indenture and the Securities.
Article
IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company herein and in the Securities; or
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(2) to add to the covenants of the Company for the benefit of some or all of the Holders of all or any series of Securities or of particular Securities within a series as may be specified in the Board Resolutions (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series or such particular Securities) or to surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of some or all of the Holders of all or any series of Securities or of particular Securities within a series as may be specified in the Board Resolutions (and if such additional Events of Default are to be for the benefit of less than all series of Securities, stating that such additional Events of Default are expressly being included solely for the benefit of such series or such particular Securities); or
(4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registrable or not registrable as to principal, and with or without interest coupons, or to permit or facilitate the issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture in respect of one or more series of Securities, provided that any such addition, change or elimination (A) shall neither (i) apply to any Security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor (ii) modify the rights of the Holder of any such Security with respect to such provision or (B) shall become effective only when there is no Security described in clause (i) Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series as permitted by Sections 2.01 and 3.01; or
(8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.11; or
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(9) to cure any ambiguity, to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, provided that such action pursuant to this Clause (9) shall not adversely affect the interests of the Holders of Securities of any series in any material respect.
Section 9.02 Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company and the Trustee, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; provided, however, that if the Board Resolutions and supplemental indenture shall expressly provide that any provisions to be changed or eliminated shall apply to fewer than all the Outstanding Securities hereunder or under a particular series under this Indenture, then, to the extent not inconsistent with the Trust Indenture Act, any such consent may be given by Holders of not less than a majority in principal amount of the Outstanding Securities hereunder or under such series to which such change or elimination shall apply; provided, further, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby (whether or not such affected Securities comprise all Securities under this Indenture or under a particular series),
(1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security or any other Security which would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.02, or change any Place of Payment where, or the coin or currency in which, any Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date); or
(2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or
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(3) modify any of the provisions of this Section, Section 5.13 or Section 10.08, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby.
A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more identified series of Securities or particular Securities within an identified series of Securities, or which modifies the rights of the Holders of Securities of such series, or Holder of particular Securities within a series with respect to such covenant or other provision, shall be deemed to affect only the rights under this Indenture of the Holders of Securities of the identified series or of particular Securities within the identified series, and shall be deemed not to affect the rights under this Indenture of the Holders of any other Securities.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
After a supplemental indenture under this Section 9.02 becomes effective, the Company shall give to the Trustee a notice briefly describing such supplemental indenture or a copy of such supplemental indenture and the Trustee shall give such notice or supplemental indenture to Holders affected thereby. Any failure of the Company to give such notice, or any defect therein, or any failure of the Company to give such supplemental indenture, shall not in any way impair or affect the validity of any such supplemental indenture.
Section 9.03 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 6.01) shall be fully protected in relying upon, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise.
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Section 9.04 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.05 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act.
Section 9.06 Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series.
Article
X
COVENANTS
Section 10.01 Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of and any premium and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture.
Section 10.02 Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands.
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The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.
Section 10.03 Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of or any premium or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal and any premium and interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee in writing of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of Securities, it will, prior to each due date of the principal of or any premium or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be held as provided by the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will
(1) comply with the provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(2) during the continuance of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment in respect of the Securities of that series, upon the written request of the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying Agent for payment in respect of the Securities of that series.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such. Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
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Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of or any premium or interest on any Security of any series and remaining unclaimed for two years after such principal, premium or interest has become due and payable shall be paid to the Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in the Borough of Manhattan, The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.
Section 10.04 Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the best knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.
Section 10.05 Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.
Section 10.06 Limitation on Liens on Voting Stock of Designated Subsidiaries .
So long as any series of Securities issued pursuant to this Indenture shall remain Outstanding, the Company will not and will not permit any of its Subsidiaries to, directly or indirectly, create, issue, assume, incur or guarantee any Restricted Indebtedness unless the Securities and, if the Company so elects, any other indebtedness of the Company ranking at least pari passu with the Securities, are secured equally and ratably with (or prior to) such Restricted Indebtedness for so long as such Restricted Indebtedness is so secured.
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Section 10.07 Limitations on Disposition of Stock of Certain Subsidiaries.
(1) Except as otherwise specified with respect to a specific series of Securities issued in accordance with the provisions of Section 3.01 and except in a transaction governed by Article VIII of this Indenture, so long as any Securities are Outstanding, the Company shall not, and shall not permit any Subsidiary of the Company to sell or otherwise dispose of any Restricted Stock.
(2) Notwithstanding the forgoing, Section 10.07(1) shall not apply to (i) a sale or other disposition of any shares of Restricted Stock to the Company or to one of its direct or indirect wholly-owned Subsidiaries, (ii) a sale or other disposition of any shares of such Restricted Stock for at least fair market value (as determined by the board of directors of the Person effecting such sale or disposition, acting in good faith), or (iii) a sale or other disposition required to comply with an order of a court or regulatory authority of competent jurisdiction.
Section 10.08 Waiver of Certain Covenants.
Except as otherwise specified as contemplated by Section 3.01 for Securities of such series, the Company may, with respect to the Securities of any series, omit in any particular instance to comply with any term, provision or condition set forth in any covenant provided pursuant to Section 3.01(18), 9.01(2) or 9.01(7) for the benefit of the Holders of such series or in Section 10.05, if before the time for such compliance the Holders of at least a majority in principal amount of the Outstanding Securities of such series shall, by Act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect.
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Article
XI
REDEMPTION OF SECURITIES
Section 11.01 Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 3.01 for such Securities) in accordance with this Article.
Section 11.02 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by a Board. Resolution or in another manner specified as contemplated by Section 3.01 for such Securities. In case of any redemption at the election of the Company of the Securities of any series (including any such redemption affecting only a single Security), the Company shall, at least 10 days but not more than 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date, of the principal amount of Securities of such series to be redeemed and, if applicable, of the tenor of the Securities to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers’ Certificate evidencing compliance with such restriction.
Section 11.03 Selection of Securities to Be Redeemed.
If less than all the Securities of any series represented by one or more Global Securities are to be redeemed, the particular Securities to be redeemed shall be selected in accordance with the procedures of the Depositary from the Outstanding Securities of such series not previously called for redemption; provided that the unredeemed portion of the principal amount of any Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security. If less than all the Securities of such series and of a specified tenor not represented by one or more Global Securities are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series and specified tenor not represented by a Global Security and not previously called for redemption in accordance with the preceding sentence.
With respect to Securities not represented by one or more Global Securities, the Trustee shall promptly notify the Company in writing of the Securities selected for redemption as aforesaid and, in case of any such Securities selected for partial redemption as aforesaid, the principal amount thereof to be redeemed.
In the case of any such redemption in part, the unredeemed portion of the principal amount of the Security shall be in an authorized denomination (which shall not be less than the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed.
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Section 11.04 Notice of Redemption.
Unless otherwise specified as contemplated by Section 3.01, notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 5 Business Days nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register; provided, that with respect to Securities issued in the form of one or more Global Securities, notice of redemption shall be given in accordance with the procedures of the Depositary.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption of any such Securities, the principal amounts) of the particular Securities to be redeemed and, if less than all the Outstanding Securities of any series not represented by one or more Global Securities are to be redeemed, the principal amount of the particular Security to be redeemed;
(4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date;
(5) the place or places where each such Security is to be surrendered for payment of the Redemption Price;
(6) that the redemption is for a sinking fund, if such is the case; and
(7) if applicable, the CUSIP numbers of the Securities of that series.
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company’s request, by the Trustee in the name and at the expense of the Company and, unless otherwise specified or contemplated by Section 3.01, shall be irrevocable.
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Section 11.05 Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.03) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date or the Securities of the series provide otherwise) accrued interest on, all the Securities which are to be redeemed on that date.
Section 11.06 Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company at the Redemption Price, together, if applicable, with accrued interest to the Redemption Date; provided, however, that, unless otherwise specified as contemplated by Section 3.01, installments of interest whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security.
Section 11.07 Securities Redeemed in Part.
Any Security which is to be redeemed only in part and which is not represented by a Global Security shall be surrendered at a Place of Payment therefor (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. Any Security which is to be redeemed only in part and which is represented by a Global Security shall be redeemed in accordance with the procedures of the Depositary.
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Article
XII
SINKING FUNDS
Section 12.01 Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of any series except as otherwise specified as contemplated by Section 3.01 for such Securities.
The minimum amount of any sinking fund payment provided for by the terms of any series of Securities is herein referred to as a “mandatory sinking fund payment”, and any payment in excess of such minimum amount provided for by the terms of such Securities is herein referred to as an “optional sinking fund payment”. If provided for by the terms of any series of Securities, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.02. Each sinking fund payment shall be applied to the redemption of Securities of the series as provided for by the terms of such Securities.
Section 12.02 Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to any Securities of such series required to be made pursuant to the terms of such Securities as and to the extent provided for by the terms of such Securities; provided that the Securities to be so credited have not been previously so credited. The Securities to be so credited shall be received and credited for such purpose by the Trustee at the Redemption Price, as specified in the Securities so to be redeemed, for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly.
Section 12.03 Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any Securities, the Company will deliver to the Trustee an Officers’ Certificate specifying the amount of the next ensuing sinking fund payment for such Securities pursuant to the terms of such Securities, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities pursuant to Section 12.02 and will also deliver to the Trustee any Securities to be so delivered. Not less than 30 days prior to each such sinking fund payment date, the Securities to be redeemed upon such sinking fund payment date shall be selected in the manner specified in Section 11.03 and the Trustee shall cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.04. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.06 and 11.07.
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Article
XIII
DEFEASANCE AND COVENANT DEFEASANCE
Section 13.01 Company’s Option to Effect Defeasance or Covenant Defeasance.
Unless otherwise provided as contemplated by Section 3.01, Sections 13.02 and 13.03 shall apply to any Securities or any series of Securities, as the case may be, in either case, denominated in U.S. dollars and bearing interest at a fixed rate, in accordance with any applicable requirements provided pursuant to Section 3.01 and upon compliance with the conditions set forth below in this Article; and the Company may elect, at its option at any time, to have Sections 13.02 and 13.03 applied to any Securities or any series of Securities, as the case may be, designated pursuant to Section 3.01 as being defeasible pursuant to such Section 13.02 or 13.03, in accordance with any applicable requirements provided pursuant to Section 3.01 and upon compliance with the conditions set forth below in this Article. Any such election to have or not to have Sections 13.02 and 13.03 apply, as the case may be, shall be evidenced by a Board Resolution or in another manner specified as contemplated by Section 3.01 for such Securities.
Section 13.02 Defeasance and Discharge.
Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, or if this Section shall otherwise apply to any Securities or any series of Securities, as the case may be, the Company shall be deemed to have been discharged from its obligations with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 13.04 are satisfied (hereinafter called “Defeasance”). For this purpose, such Defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by such Securities and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), subject to the following which shall survive until otherwise terminated or discharged hereunder: (1) the rights of Holders of such Securities to receive, solely from the trust fund described in Section 13.04 and as more fully set forth in such Section, payments in respect of the principal of and any premium and interest on such Securities when payments are due, (2) the Company’s obligations with respect to such Securities under Sections 3.04, 3.05, 3.06, 10.02 and 10.03, (3) the rights, powers, trusts, duties and immunities of the Trustee hereunder, including, without limitation, its rights under Section 6.07 and (4) this Article. Subject to compliance with this Article, the Company may exercise its option (if any) to have this Section applied to the Securities of any series notwithstanding the prior exercise of its option (if any) to have Section 13.03 applied to such Securities.
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Section 13.03 Covenant Defeasance.
Upon the Company’s exercise of its option (if any) to have this Section applied to any Securities or any series of Securities, as the case may be, or if this Section shall otherwise apply to any Securities or any series of Securities, as the case may be, (1) the Company shall be released from its obligations under Section 10.05 and any covenants provided pursuant to Section 3.01(18), 9.01(2) or 9.01(7) for the benefit of the Holders of such Securities and (2) the occurrence of any event specified in Sections 5.01(4) (with respect to Section 10.05 and any such covenants provided pursuant to Section 3.01(18), 9.01(2) or 9.01(7)) and 5.01(7) shall be deemed not to be or result in an Event of Default, in each case with respect to such Securities as provided in this Section on and after the date the conditions set forth in Section 13.04 are satisfied (hereinafter called “Covenant Defeasance”). For this purpose, such Covenant Defeasance means that, with respect to such Securities, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such specified Section (to the extent so specified in the case of Section 5.01(4)), whether directly or indirectly by reason of any reference elsewhere herein to any such Section or by reason of any reference in any such Section to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby.
Section 13.04 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of Section 13.02 or 13.03 to any Securities or any series of Securities, as the case may be:
(1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee which satisfies the requirements contemplated by Section 6.09 and agrees to comply with the provisions of this Article applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefits of the Holders and beneficial owners of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, in each case sufficient, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or any such other qualifying trustee) to pay and discharge, the principal of and any premium and interest on such Securities on the respective Stated Maturities, in accordance with the terms of this Indenture and such Securities. As used herein, “U.S. Government Obligation” means (x) any security which is (i) a direct obligation of the United States of America for the payment of which the full faith and credit of the United States of America is pledged or (ii) an obligation of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case (i) or (ii), is not callable or redeemable at the option of the issuer thereof, and (y) any depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S. Government Obligation which is specified in Clause (x) above and held by such bank for the account of the holder of such depositary receipt, or with respect to any specific payment of principal of or interest on any U.S. Government Obligation which is so specified and held, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal or interest evidenced by such depositary receipt.
68 |
(2) In the event of an election to have Section 13.02 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this instrument, there has been a change in the applicable Federal income tax law, in either case (A) or (B) to the effect that, and based thereon such opinion shall confirm that, the Holders and beneficial owners of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit, Defeasance and discharge to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit, Defeasance and discharge were not to occur.
(3) In the event of an election to have Section 13.03 apply to any Securities or any series of Securities, as the case may be, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders and beneficial owners of such Securities will not recognize gain or loss for Federal income tax purposes as a result of the deposit and Covenant Defeasance to be effected with respect to such Securities and will be subject to Federal income tax on the same amount, in the same manner and at the same times as would be the case if such deposit and Covenant Defeasance were not to occur.
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(4) The Company shall have delivered to the Trustee an Officers’ Certificate to the effect that neither such Securities nor any other Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would become, an Event of Default with respect to such Securities or any other Securities shall have occurred and be continuing at the time of such deposit or, with regard to any such event specified in Sections 5.01(5) and (6), at any time on or prior to the 90th day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to have a conflicting interest within the meaning of the Trust Indenture Act (assuming all Securities are in default within the meaning of such Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any other agreement or instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the trust arising from such deposit constituting an investment company within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent with respect to such Defeasance or Covenant Defeasance have been complied with (in each case, subject to the satisfaction of the condition in clause (5)).
Section 13.05 Deposited Money and U.S. Government Obligations to Be Held in Trust; Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.03, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee (solely for purposes of this Section and Section 13.06, the Trustee and any such other trustee are referred to collectively as the “Trustee”) pursuant to Section 13.04 in respect of any Securities shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any such Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal and any premium and interest, but money so held in trust need not be segregated from other funds except to the extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 13.04 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 13.04 with respect to any Securities which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect the Defeasance or Covenant Defeasance, as the case may be, with respect to such Securities.
Section 13.06 Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in accordance with this Article with respect to any Securities by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the obligations under this Indenture and such Securities from which the Company has been discharged or released pursuant to Section 13.02 or 13.03 shall be revived and reinstated as though no deposit had occurred pursuant to this Article with respect to such Securities, until such time as the Trustee or Paying Agent is permitted to apply all money held in trust pursuant to Section 13.05 with respect to such Securities in accordance with this Article; provided, however, that if the Company makes any payment of principal of or any premium or interest on any such Security following such reinstatement of its obligations, the Company shall be subrogated to the rights (if any) of the Holders of such Securities to receive such payment from the money so held in trust.
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.
COREBRIDGE FINANCIAL, INC. | ||
By: | /s/ Elias Habayeb | |
Name: Elias Habayeb | ||
Title: Executive Vice President and Chief Financial Officer | ||
THE BANK OF NEW YORK MELLON, | ||
As Trustee | ||
By: | /s/ Francine Kincaid | |
Name: Francine Kincaid | ||
Title: Vice President |
Exhibit 4.3
COREBRIDGE FINANCIAL, INC.
First Supplemental
Indenture
Dated as of April 5, 2022
(Supplemental to Indenture Dated as of April 5, 2022)
THE BANK OF NEW YORK MELLON
as Trustee
FIRST SUPPLEMENTAL INDENTURE, dated as of April 5, 2022 (the “First Supplemental Indenture”), between Corebridge Financial, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), and The Bank of New York Mellon, a New York banking corporation, as Trustee (herein called “Trustee”);
R E C I T A L S:
WHEREAS, the Company has heretofore executed and delivered to the Trustee, an Indenture, dated as of April 5, 2022 (the “Existing Indenture”), providing for the issuance from time to time of the Company’s unsecured debt securities, debentures, notes, bonds or other evidences of indebtedness (herein and therein called the “Securities”), to be issued in one or more series; and the Existing Indenture, as may be amended or supplemented from time to time, including by this First Supplemental Indenture, is hereinafter referred to as the “Indenture”;
WHEREAS, Section 9.01 of the Existing Indenture permits the Company and the Trustee to enter into an indenture supplemental to the Existing Indenture to establish the form and terms of additional series of Securities;
WHEREAS, Sections 2.01, 3.01 and 9.01 of the Existing Indenture permit the form and the terms of Securities of any additional series of Securities to be established pursuant to an indenture supplemental to the Existing Indenture;
WHEREAS, the Company has authorized the issuance of $1,000,000,000 in aggregate principal amount of its 3.500% Senior Notes due 2025 (the “Notes”);
WHEREAS, the Notes will be established as a series of Securities under the Indenture;
WHEREAS, the Company has duly authorized the execution and delivery of this First Supplemental Indenture to establish the form and terms of the Notes; and
WHEREAS, all things necessary to make this First Supplemental Indenture a valid and legally binding agreement according to its terms have been done;
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE
One
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Relation to Existing Indenture
This First Supplemental Indenture constitutes a part of the Indenture (the provisions of which, as modified by this First Supplemental Indenture, shall apply to the Notes) in respect of the Notes, and shall not modify, amend or otherwise affect the Existing Indenture insofar as it relates to any other series of Securities or affect in any manner the terms and conditions of the Securities of any other series.
Section 1.2 Definitions
For all purposes of this First Supplemental Indenture, the capitalized terms used herein (i) which are defined in the recitals or introductory paragraph hereof have the respective meanings assigned thereto in the applicable provision of the recitals and introductory paragraph, and (ii) which are defined in the Existing Indenture (and which are not defined in the recitals or introductory paragraph hereof) have the respective meanings assigned thereto in the Existing Indenture. For all purposes of this First Supplemental Indenture:
(a) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this First Supplemental Indenture;
(b) The terms “herein”, “hereof”, and “hereunder” and words of similar import refer to this First Supplemental Indenture; and
(c) The following terms have the meanings set forth below:
“Exchange Notes” means notes issued by the Company hereunder containing terms identical to the Notes (except (i) that interest thereon shall accrue from the last date on which interest was paid on the Notes or, if no such interest has been paid, from the Original Issue Date, (ii) that the legend or legends relating to transferability and other related matters set forth on the Notes, including the Restricted Legend, shall be removed or appropriately altered and (iii) as otherwise set forth herein), to be offered to holders of Notes in exchange for Exchange Notes pursuant to the Exchange Offer.
“Exchange Offer” means a Registered Exchange Offer as defined in the Registration Rights Agreement.
“Original Issue Date” means April 5, 2022.
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“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the Original Issue Date, between the Company and the Representatives.
“Regulation S” means Regulation S as promulgated under the Securities Act.
“Representatives” means J.P Morgan Securities LLC and Citigroup Global Markets Inc., acting as representatives of the several initial purchasers under the Purchase Agreement, dated March 31, 2022, between the Company and the Representatives.
“Rule 144” means Rule 144 promulgated under the Securities Act or any successor provision.
“Restricted Legend” means the legends set forth on Annex A to this First Supplemental Indenture under the heading “Restricted Legend.”
“Securities Act” means the Securities Act of 1933, as amended.
“Temporary Regulation S Legend” means the third paragraph of the legend set forth on Annex A to this First Supplemental Indenture under the heading “Temporary Regulation S Legend.”
ARTICLE
Two
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Forms of Notes Generally
The Notes shall be in substantially the forms set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Existing Indenture and this First Supplemental Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary thereto, or as may, consistent with the Existing Indenture and this First Supplemental Indenture, be determined by the officers executing such Notes, as evidenced by their execution of such Notes.
The Notes shall be issued initially in the form of the Global Notes, registered in the name of the Depositary or its nominee and deposited with the Trustee, as custodian for the Depositary, for credit by the Depositary to the respective accounts of beneficial owners of the Notes represented thereby (or such other accounts as they may direct). Each such Global Note will constitute a single Security for all purposes of the Indenture.
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Section 2.2 Form of Notes
The Notes shall be in substantially the form of Annex A to this First Supplemental Indenture.
Section 2.3 Form of Trustee’s Certificate of Authentication of the Notes
The Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON. | ||
As Trustee | ||
By: | ||
Authorized Signatory |
Section 2.4 Title and Terms
Pursuant to Sections 2.01 and 3.01 of the Indenture, there is hereby established a series of Securities, the terms of which shall be as follows:
(a) Designation. The Notes shall be known and designated as the “3.500% Senior Notes due 2025.”
(b) Aggregate Principal Amount. The aggregate principal amount of the Notes that may be authenticated and delivered under this First Supplemental Indenture is initially limited to $1,000,000,000 except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes issued pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07 or 12.03 of the Existing Indenture. The Company may, without the consent of the Holders of the Notes, issue additional notes of this series in an unlimited amount having the same ranking, interest rate, Stated Maturity, CUSIP and ISIN numbers and terms as to status, redemption or otherwise as the Notes (other than dates as to issuance and the initial accrual of interest), in which event such notes and the Notes shall constitute one series for all purposes under the Indenture, including without limitation, amendments, waivers and redemptions.
(c) Interest and Maturity. The Stated Maturity of the Notes shall be April 4, 2025 and the Notes shall bear interest and have such other terms as are described in the form of Note attached as Annex A to this First Supplemental Indenture.
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(d) Redemption. The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision, or at the option of a Holder thereof. The Notes shall be redeemable at the election of the Company from time to time, in whole or in part, at the times and at the prices specified in the form of Note attached as Annex A to this First Supplemental Indenture. Notice of redemption shall be transmitted not less than 5 Business Days nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed at his address appearing in the Security Register.
(e) Defeasance. The Notes shall be subject to the defeasance and discharge provisions of Section 13.02 of the Existing Indenture and the defeasance of certain obligations and certain events of default provisions of Section 13.03 of the Existing Indenture.
(f) Denominations. The Notes shall be issuable only in fully registered form without coupons and only in denominations of $2,000 and multiples of $1,000 in excess thereof.
(g) Authentication and Delivery. The Notes shall be executed, authenticated, delivered and dated in accordance with Section 3.03 of the Existing Indenture.
(h) Depositary. With respect to Notes issuable or issued in whole or in part in the form of one or more Global Notes, the Depositary shall be The Depository Trust Company, for so long as it shall be a clearing agency registered under the Exchange Act, or such successor (which shall be a clearing agency registered under the Exchange Act) as the Company shall designate from time to time in an Officers’ Certificate delivered to the Trustee.
Section 2.5 Exchanges of Global Note for Non-Global Note
Notwithstanding any other provision in this Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Note or a nominee thereof unless (A) such Depositary has notified the Company that it is unwilling or unable or no longer permitted under applicable law to continue as Depositary for such Global Note and the Company does not appoint another institution to act as Depositary within 90 days, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Note, or (C) the Company so directs the Trustee by a Company Order.
Section 2.6 Restricted Legend
(a) Except as otherwise provided in paragraph (d) of this Section 2.6, or Section 2.5, each Note shall bear the legend set forth in Section 2.04 of the Existing Indenture and the Restricted Legend and any temporary Global Security authenticated and delivered for any Notes offered and sold in offshore transactions in reliance on Regulation S shall bear the Temporary Regulation S Legend. Following the expiration of the distribution compliance period set forth in Regulation S with respect to any temporary Global Securities, beneficial interests in such temporary Global Securities shall be exchanged for one or more permanent Global Securities.
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(b) The Notes shall initially be issued in the form of one or more individual Securities registered in the name of the Depositary. Any such Global Securities shall be Global Securities for purposes of the Existing Indenture and shall be subject to the provisions thereof governing Global Securities, except as modified hereby.
(c) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144 without compliance with any limits thereunder and that the Restricted Legend or Temporary Regulation S Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, the Company shall instruct the Trustee in a Company Order to cancel the Note and to authenticate and deliver to the Holder thereof (or to its transferee) a new Note of like tenor and amount of the same series, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend or Temporary Regulation S Legend, and the Trustee, upon receipt of an Officers’ Certificate and an Opinion of Counsel pursuant to Section 1.02 of the Existing Indenture, will comply with such Company Order.
(d) By its acceptance of any Note bearing the Restricted Legend or Temporary Regulation S Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this First Supplemental Indenture and in the Restricted Legend and Temporary Regulation S Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with this First Supplemental Indenture and such legend.
Section 2.7 Exchange Offer
Upon the occurrence of the Exchange Offer, the Company shall issue and, upon receipt of a Company Order, the Trustee shall authenticate (i) one or more Global Securities without the Restricted Legend or the Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the beneficial interests in the Global Securities with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer and (ii) definitive Notes (if any) without the Restricted Legend or Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the definitive Notes with the Restricted Legend or Temporary Regulations S Legend accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Global Securities with the Restricted Legend or Temporary Regulation S Legend to be reduced accordingly and shall cause any definitive Notes with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer to be cancelled in accordance with Section 3.09 of the Existing Indenture. Any Notes that remain outstanding after the consummation of an Exchange Offer, and Exchange Notes issued in connection with an Exchange Offer, shall be treated as a single class of Notes under this Indenture.
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ARTICLE
Three
MISCELLANEOUS
Section 3.1 Relationship to Existing Indenture
This First Supplemental Indenture is a supplemental indenture within the meaning of the Existing Indenture. The Existing Indenture, as supplemented and amended by this First Supplemental Indenture, is in all respects ratified, confirmed and approved and, with respect to the Notes, the Existing Indenture, as supplemented and amended by this First Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
Section 3.2 Modification of the Existing Indenture
Except as expressly modified by this First Supplemental Indenture, the provisions of the Existing Indenture shall govern the terms and conditions of the Notes.
Section 3.3 Governing Law
This instrument shall be governed by, and construed in accordance with, the laws of the State of New York.
Section 3.4 Counterparts
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Receipt by telecopy or electronic mail of any executed signature page to this instrument shall constitute effective delivery of such signature page. Electronic signatures may be used in lieu of signatures affixed by hand, and such electronic signature shall have the same validity and effect as signatures affixed by hand.
Section 3.5 Trustee Makes No Representation
The recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this First Supplemental Indenture other than its certificates of authentication.
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In Witness Whereof, the parties hereto have caused this First Supplemental Indenture to be duly executed all as of the day and year first above written.
COREBRIDGE FINANCIAL, INC. | ||
By: | /s/ Elias Habayeb | |
Name: Elias Habayeb | ||
Title: Executive Vice President and Chief Financial Officer | ||
THE BANK OF NEW YORK MELLON, | ||
as Trustee | ||
By: | /s/ Francine Kincaid | |
Name: Francine Kincaid | ||
Title: Vice President |
[Signature Page to First Supplemental Indenture]
ANNEX A
FORM OF THE NOTES
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE DEPOSITORY TRUST COMPANY (“DTC”), TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Temporary Regulation S Legend
[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT (AS DEFINED BELOW)) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
Restricted Legend
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S, ONLY (A) TO THE ISSUER, ANY SUBSIDIARY THEREOF OR AIG, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (B) ABOVE OR REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO IN THIS PARAGRAPH. IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
BY ITS ACQUISITION OF THIS NOTE, THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS NOTE CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OF A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (A “COVERED PLAN”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF AN ENTITY OR ACCOUNT WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.
BY ITS ACQUISITION OF THIS NOTE, EACH PURCHASER OF THIS NOTE THAT IS USING ASSETS OF ANY COVERED PLAN TO ACQUIRE OR HOLD THIS NOTE PURSUANT TO THE INITIAL OFFERING WILL BE DEEMED TO REPRESENT THAT NONE OF THE ISSUER, THE INITIAL PURCHASERS OR ANY OF THE ISSUER’S OR THEIR RESPECTIVE AFFILIATES HAS ACTED AS THE COVERED PLAN’S FIDUCIARY, OR HAS BEEN RELIED UPON FOR ANY ADVICE, WITH RESPECT TO THE PURCHASER’S DECISION TO ACQUIRE THE NOTES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC, A NEW YORK CORPORATION, TO COREBRIDGE FINANCIAL, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
COREBRIDGE FINANCIAL, INC.
3.500% SENIOR NOTES DUE 2025
No. [●]
CUSIP No.: [●]
ISIN No.: [●]
COREBRIDGE FINANCIAL, INC., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [●] Dollars ($[●]) on [●], and to pay interest thereon from April 5, 2022 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semiannually in arrears on each April 4 and October 4 (each such date, an “Interest Payment Date”), commencing on October 4, 2022, at the rate of 3.500% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be March 20 or September 20 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a “Special Record Date” for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof which shall be given to Holders of Notes of this series not less than 10 days prior to such “Special Record Date,” all as more fully provided in said Indenture.
Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
In the event that an Interest Payment Date is not a Business Day, the Company shall pay interest on the next succeeding Business Day, with the same force and effect as if made on the Interest Payment Date, and without any interest or other payment with respect to the delay. If the Stated Maturity or earlier Redemption Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the Stated Maturity or earlier Redemption Date, provided that no interest shall accrue for the period from and after such Stated Maturity or earlier Redemption Date.
Payment of the principal of and premium, if any, and interest on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which shall initially be the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, facsimile or electronic signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
COREBRIDGE FINANCIAL, INC. | ||
By: | ||
Name: | ||
Title: |
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON | ||
As Trustee | ||
By: | ||
Authorized Signatory |
[Reverse of the Notes]
This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), designated as its 3.500% Senior Notes due 2025, issued and to be issued in one or more series under an Indenture, dated as of April 5, 2022 (the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof.
Prior to March 4, 2025 (the “Par Call Date”), the Company may redeem the Notes of this series at its option, in whole or in part, at any time and from time to time, upon not less than 5 Business Days nor more than 60 days’ notice given as provided in the Indenture, at a Redemption Price equal to the greater of:
(a) (i) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the Note matures on the Par Call Date) on a semi-annual basis at the Treasury Rate plus 20 basis points (ii) interest accrued to the Redemption Date; and
(b) 100% of the principal amount,
plus, in either case, accrued and unpaid interest thereon to the Redemption Date.
On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date.
The definitions of certain terms used in the paragraph above are listed below.
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Company in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Company after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading).
In determining the Treasury Rate, the Company shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields — one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life — and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 or any successor designation or publication is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date, as applicable. If there is no U.S. Treasury security maturing on the Par Call Date but there are two or more U.S. Treasury securities with a maturity date equally distant from the Par Call Date, one with a maturity date preceding the Par Call Date and one with a maturity date following the Par Call Date , the Company shall select the U.S. Treasury security with a maturity date preceding the Par Call Date. If there are two or more U.S. Treasury securities maturing on the Par Call Date or two or more U.S. Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more U.S. Treasury securities the U.S. Treasury security that is trading closest to par based upon the average of the bid and asked prices for such U.S. Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable U.S. Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
The Trustee shall have no responsibility to calculate, or to verify the Company’s calculation of, the redemption price.
In the event of redemption of definitive Notes in part only, a new definitive Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The Notes of this series do not have the benefit of any sinking fund obligation and are not subject to repurchase at the option of the Holders.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or premium, if any, or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, or interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, or interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in fully registered form without coupons in denominations of $2,000 and any multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in accordance with the law of the State of New York.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
Date: | Your Signature: |
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee*:
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustees).
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.
The undersigned (check one box below):
¨ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in a Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or |
¨ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
In connection with any transfer of any of the Notes evidenced by this certificate, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ¨ | to the Issuer or subsidiary thereof; or | |
(2) | ¨ | under a registration statement that has been declared effective under the Securities Act of 1933, as amended (the “Securities Act”); or | |
(3) | ¨ | for so long as the Notes are eligible for resale under Rule 144A, to a person seller reasonably believes is a qualified institutional buyer that is purchasing for its own account or the account of another qualified buyer that is purchasing for its own account or for the account of another qualified institutional buyer and to whom notice is given that the transfer is being made in reliance on Rule 144A; or | |
(4) | ¨ | through offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act; or | |
(5) | ¨ | under any other available exemption from the registration requirements of the Securities Act. |
Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5) is checked, the Issuer or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer or the Trustee has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
Your Signature |
Signature of Signature Guarantee
Date: |
Signature of Signature Guarantor |
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company, the Issuer and the Subsidiary Guarantors as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: | |
NOTICE: To be executed by an executive officer | |
Name: | |
Title: | |
Signature Guarantee*: |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in Principal Amount of this Global Note |
Amount of increase in Principal Amount of this Global Note |
Principal amount of this Global Note following such decrease or increase |
Signature of authorized signatory of U.S. Trustee or Custodian |
Exhibit 4.4
COREBRIDGE FINANCIAL, INC.
Second Supplemental
Indenture
Dated as of April 5, 2022
(Supplemental to Indenture Dated as of April 5, 2022)
THE BANK OF NEW YORK MELLON
as Trustee
SECOND SUPPLEMENTAL INDENTURE, dated as of April 5, 2022 (the “Second Supplemental Indenture”), between Corebridge Financial, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), and The Bank of New York Mellon, a New York banking corporation, as Trustee (herein called “Trustee”);
RECITALS:
WHEREAS, the Company has heretofore executed and delivered to the Trustee, an Indenture, dated as of April 5, 2022 (the “Existing Indenture”), providing for the issuance from time to time of the Company’s unsecured debt securities, debentures, notes, bonds or other evidences of indebtedness (herein and therein called the “Securities”), to be issued in one or more series; and the Existing Indenture, as may be amended or supplemented from time to time, including by this Second Supplemental Indenture, is hereinafter referred to as the “Indenture”;
WHEREAS, Section 9.01 of the Existing Indenture permits the Company and the Trustee to enter into an indenture supplemental to the Existing Indenture to establish the form and terms of additional series of Securities;
WHEREAS, Sections 2.01, 3.01 and 9.01 of the Existing Indenture permit the form and the terms of Securities of any additional series of Securities to be established pursuant to an indenture supplemental to the Existing Indenture;
WHEREAS, the Company has authorized the issuance of $1,250,000,000 in aggregate principal amount of its 3.650% Senior Notes due 2027 (the “Notes”);
WHEREAS, the Notes will be established as a series of Securities under the Indenture;
WHEREAS, the Company has duly authorized the execution and delivery of this Second Supplemental Indenture to establish the form and terms of the Notes; and
WHEREAS, all things necessary to make this Second Supplemental Indenture a valid and legally binding agreement according to its terms have been done;
NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE
One
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Relation to Existing Indenture
This Second Supplemental Indenture constitutes a part of the Indenture (the provisions of which, as modified by this Second Supplemental Indenture, shall apply to the Notes) in respect of the Notes, and shall not modify, amend or otherwise affect the Existing Indenture insofar as it relates to any other series of Securities or affect in any manner the terms and conditions of the Securities of any other series.
Section 1.2 Definitions
For all purposes of this Second Supplemental Indenture, the capitalized terms used herein (i) which are defined in the recitals or introductory paragraph hereof have the respective meanings assigned thereto in the applicable provision of the recitals and introductory paragraph, and (ii) which are defined in the Existing Indenture (and which are not defined in the recitals or introductory paragraph hereof) have the respective meanings assigned thereto in the Existing Indenture. For all purposes of this Second Supplemental Indenture:
(a) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Second Supplemental Indenture;
(b) The terms “herein”, “hereof”, and “hereunder” and words of similar import refer to this Second Supplemental Indenture; and
(c) The following terms have the meanings set forth below:
“Exchange Notes” means notes issued by the Company hereunder containing terms identical to the Notes (except (i) that interest thereon shall accrue from the last date on which interest was paid on the Notes or, if no such interest has been paid, from the Original Issue Date, (ii) that the legend or legends relating to transferability and other related matters set forth on the Notes, including the Restricted Legend, shall be removed or appropriately altered and (iii) as otherwise set forth herein), to be offered to holders of Notes in exchange for Exchange Notes pursuant to the Exchange Offer.
“Exchange Offer” means a Registered Exchange Offer as defined in the Registration Rights Agreement.
“Original Issue Date” means April 5, 2022.
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“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the Original Issue Date, between the Company and the Representatives.
“Regulation S” means Regulation S as promulgated under the Securities Act.
“Representatives” means J.P Morgan Securities LLC and Citigroup Global Markets Inc., acting as representatives of the several initial purchasers under the Purchase Agreement, dated March 31, 2022, between the Company and the Representatives.
“Rule 144” means Rule 144 promulgated under the Securities Act or any successor provision.
“Restricted Legend” means the legends set forth on Annex A to this Second Supplemental Indenture under the heading “Restricted Legend.”
“Securities Act” means the Securities Act of 1933, as amended.
“Temporary Regulation S Legend” means the third paragraph of the legend set forth on Annex A to this Second Supplemental Indenture under the heading “Temporary Regulation S Legend.”
ARTICLE
Two
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Forms of Notes Generally
The Notes shall be in substantially the forms set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Existing Indenture and this Second Supplemental Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary thereto, or as may, consistent with the Existing Indenture and this Second Supplemental Indenture, be determined by the officers executing such Notes, as evidenced by their execution of such Notes.
The Notes shall be issued initially in the form of the Global Notes, registered in the name of the Depositary or its nominee and deposited with the Trustee, as custodian for the Depositary, for credit by the Depositary to the respective accounts of beneficial owners of the Notes represented thereby (or such other accounts as they may direct). Each such Global Note will constitute a single Security for all purposes of the Indenture.
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Section 2.2 Form of Notes
The Notes shall be in substantially the form of Annex A to this Second Supplemental Indenture.
Section 2.3 Form of Trustee’s Certificate of Authentication of the Notes
The Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON. | ||
As Trustee | ||
By: | ||
Authorized Signatory |
Section 2.4 Title and Terms
Pursuant to Sections 2.01 and 3.01 of the Indenture, there is hereby established a series of Securities, the terms of which shall be as follows:
(a) Designation. The Notes shall be known and designated as the “3.650 % Senior Notes due 2027.”
(b) Aggregate Principal Amount. The aggregate principal amount of the Notes that may be authenticated and delivered under this Second Supplemental Indenture is initially limited to $1,250,000,000 except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes issued pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07 or 12.03 of the Existing Indenture. The Company may, without the consent of the Holders of the Notes, issue additional notes of this series in an unlimited amount having the same ranking, interest rate, Stated Maturity, CUSIP and ISIN numbers and terms as to status, redemption or otherwise as the Notes (other than dates as to issuance and the initial accrual of interest), in which event such notes and the Notes shall constitute one series for all purposes under the Indenture, including without limitation, amendments, waivers and redemptions.
(c) Interest and Maturity. The Stated Maturity of the Notes shall be April 5, 2027 and the Notes shall bear interest and have such other terms as are described in the form of Note attached as Annex A to this Second Supplemental Indenture.
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(d) Redemption. The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision, or at the option of a Holder thereof. The Notes shall be redeemable at the election of the Company from time to time, in whole or in part, at the times and at the prices specified in the form of Note attached as Annex A to this Second Supplemental Indenture. Notice of redemption shall be transmitted not less than 5 Business Days nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed at his address appearing in the Security Register.
(e) Defeasance. The Notes shall be subject to the defeasance and discharge provisions of Section 13.02 of the Existing Indenture and the defeasance of certain obligations and certain events of default provisions of Section 13.03 of the Existing Indenture.
(f) Denominations. The Notes shall be issuable only in fully registered form without coupons and only in denominations of $2,000 and multiples of $1,000 in excess thereof.
(g) Authentication and Delivery. The Notes shall be executed, authenticated, delivered and dated in accordance with Section 3.03 of the Existing Indenture.
(h) Depositary. With respect to Notes issuable or issued in whole or in part in the form of one or more Global Notes, the Depositary shall be The Depository Trust Company, for so long as it shall be a clearing agency registered under the Exchange Act, or such successor (which shall be a clearing agency registered under the Exchange Act) as the Company shall designate from time to time in an Officers’ Certificate delivered to the Trustee.
Section 2.5 Exchanges of Global Note for Non-Global Note
Notwithstanding any other provision in this Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Note or a nominee thereof unless (A) such Depositary has notified the Company that it is unwilling or unable or no longer permitted under applicable law to continue as Depositary for such Global Note and the Company does not appoint another institution to act as Depositary within 90 days, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Note, or (C) the Company so directs the Trustee by a Company Order.
Section 2.6 Restricted Legend
(a) Except as otherwise provided in paragraph (d) of this Section 2.6, or Section 2.5, each Note shall bear the legend set forth in Section 2.04 of the Existing Indenture and the Restricted Legend and any temporary Global Security authenticated and delivered for any Notes offered and sold in offshore transactions in reliance on Regulation S shall bear the Temporary Regulation S Legend. Following the expiration of the distribution compliance period set forth in Regulation S with respect to any temporary Global Securities, beneficial interests in such temporary Global Securities shall be exchanged for one or more permanent Global Securities.
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(b) The Notes shall initially be issued in the form of one or more individual Securities registered in the name of the Depositary. Any such Global Securities shall be Global Securities for purposes of the Existing Indenture and shall be subject to the provisions thereof governing Global Securities, except as modified hereby.
(c) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144 without compliance with any limits thereunder and that the Restricted Legend or Temporary Regulation S Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, the Company shall instruct the Trustee in a Company Order to cancel the Note and to authenticate and deliver to the Holder thereof (or to its transferee) a new Note of like tenor and amount of the same series, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend or Temporary Regulation S Legend, and the Trustee, upon receipt of an Officers’ Certificate and an Opinion of Counsel pursuant to Section 1.02 of the Existing Indenture, will comply with such Company Order.
(d) By its acceptance of any Note bearing the Restricted Legend or Temporary Regulation S Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Second Supplemental Indenture and in the Restricted Legend and Temporary Regulation S Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with this Second Supplemental Indenture and such legend.
Section 2.7 Exchange Offer
Upon the occurrence of the Exchange Offer, the Company shall issue and, upon receipt of a Company Order, the Trustee shall authenticate (i) one or more Global Securities without the Restricted Legend or the Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the beneficial interests in the Global Securities with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer and (ii) definitive Notes (if any) without the Restricted Legend or Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the definitive Notes with the Restricted Legend or Temporary Regulations S Legend accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Global Securities with the Restricted Legend or Temporary Regulation S Legend to be reduced accordingly and shall cause any definitive Notes with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer to be cancelled in accordance with Section 3.09 of the Existing Indenture. Any Notes that remain outstanding after the consummation of an Exchange Offer, and Exchange Notes issued in connection with an Exchange Offer, shall be treated as a single class of Notes under this Indenture.
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ARTICLE
Three
MISCELLANEOUS
Section 3.1 Relationship to Existing Indenture
This Second Supplemental Indenture is a supplemental indenture within the meaning of the Existing Indenture. The Existing Indenture, as supplemented and amended by this Second Supplemental Indenture, is in all respects ratified, confirmed and approved and, with respect to the Notes, the Existing Indenture, as supplemented and amended by this Second Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
Section 3.2 Modification of the Existing Indenture
Except as expressly modified by this Second Supplemental Indenture, the provisions of the Existing Indenture shall govern the terms and conditions of the Notes.
Section 3.3 Governing Law
This instrument shall be governed by, and construed in accordance with, the laws of the State of New York.
Section 3.4 Counterparts
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Receipt by telecopy or electronic mail of any executed signature page to this instrument shall constitute effective delivery of such signature page. Electronic signatures may be used in lieu of signatures affixed by hand, and such electronic signature shall have the same validity and effect as signatures affixed by hand.
Section 3.5 Trustee Makes No Representation
The recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Second Supplemental Indenture other than its certificates of authentication.
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In Witness Whereof, the parties hereto have caused this Second Supplemental Indenture to be duly executed all as of the day and year first above written.
COREBRIDGE FINANCIAL, INC. | ||
By: | /s/ Elias Habayeb | |
Name: Elias Habayeb | ||
Title: Executive Vice President and Chief Financial Officer | ||
THE BANK OF NEW YORK MELLON, | ||
as Trustee | ||
By: | /s/ Francine Kincaid | |
Name: Francine Kincaid | ||
Title: Vice President |
[Signature Page to Second Supplemental Indenture]
ANNEX A
FORM OF THE NOTES
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE DEPOSITORY TRUST COMPANY (“DTC”), TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Temporary Regulation S Legend
[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT (AS DEFINED BELOW)) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
Restricted Legend
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S, ONLY (A) TO THE ISSUER, ANY SUBSIDIARY THEREOF OR AIG, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (B) ABOVE OR REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO IN THIS PARAGRAPH. IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
BY ITS ACQUISITION OF THIS NOTE, THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS NOTE CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OF A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (A “COVERED PLAN”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF AN ENTITY OR ACCOUNT WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.
BY ITS ACQUISITION OF THIS NOTE, EACH PURCHASER OF THIS NOTE THAT IS USING ASSETS OF ANY COVERED PLAN TO ACQUIRE OR HOLD THIS NOTE PURSUANT TO THE INITIAL OFFERING WILL BE DEEMED TO REPRESENT THAT NONE OF THE ISSUER, THE INITIAL PURCHASERS OR ANY OF THE ISSUER’S OR THEIR RESPECTIVE AFFILIATES HAS ACTED AS THE COVERED PLAN’S FIDUCIARY, OR HAS BEEN RELIED UPON FOR ANY ADVICE, WITH RESPECT TO THE PURCHASER’S DECISION TO ACQUIRE THE NOTES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC, A NEW YORK CORPORATION, TO COREBRIDGE FINANCIAL, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
COREBRIDGE FINANCIAL, INC.
3.650% SENIOR NOTES DUE 2027
No. [●]
CUSIP No.: [●]
ISIN No.: [●]
COREBRIDGE FINANCIAL, INC., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [●] Dollars ($[●]) on [●], and to pay interest thereon from April 5, 2022 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semiannually in arrears on each April 5 and October 5 (each such date, an “Interest Payment Date”), commencing on October 5, 2022, at the rate of 3.650% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be March 20 or September 20 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a “Special Record Date” for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof which shall be given to Holders of Notes of this series not less than 10 days prior to such “Special Record Date,” all as more fully provided in said Indenture.
Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
In the event that an Interest Payment Date is not a Business Day, the Company shall pay interest on the next succeeding Business Day, with the same force and effect as if made on the Interest Payment Date, and without any interest or other payment with respect to the delay. If the Stated Maturity or earlier Redemption Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the Stated Maturity or earlier Redemption Date, provided that no interest shall accrue for the period from and after such Stated Maturity or earlier Redemption Date.
Payment of the principal of and premium, if any, and interest on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which shall initially be the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, facsimile or electronic signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
COREBRIDGE FINANCIAL, INC. | ||
By: | ||
Name: | ||
Title: |
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON | ||
As Trustee | ||
By: | ||
Authorized Signatory |
[Reverse of the Notes]
This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), designated as its 3.650% Senior Notes due 2027, issued and to be issued in one or more series under an Indenture, dated as of April 5, 2022 (the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof.
Prior to March 5, 2027 (the “Par Call Date”), the Company may redeem the Notes of this series at its option, in whole or in part, at any time and from time to time, upon not less than 5 Business Days nor more than 60 days’ notice given as provided in the Indenture, at a Redemption Price equal to the greater of:
(a) (i) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the Note matures on the Par Call Date) on a semi-annual basis at the Treasury Rate plus 20 basis points (ii) interest accrued to the Redemption Date; and
(b) 100% of the principal amount,
plus, in either case, accrued and unpaid interest thereon to the Redemption Date.
On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date.
The definitions of certain terms used in the paragraph above are listed below.
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Company in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Company after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading).
In determining the Treasury Rate, the Company shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields — one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life — and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 or any successor designation or publication is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date, as applicable. If there is no U.S. Treasury security maturing on the Par Call Date but there are two or more U.S. Treasury securities with a maturity date equally distant from the Par Call Date, one with a maturity date preceding the Par Call Date and one with a maturity date following the Par Call Date , the Company shall select the U.S. Treasury security with a maturity date preceding the Par Call Date. If there are two or more U.S. Treasury securities maturing on the Par Call Date or two or more U.S. Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more U.S. Treasury securities the U.S. Treasury security that is trading closest to par based upon the average of the bid and asked prices for such U.S. Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable U.S. Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
The Trustee shall have no responsibility to calculate, or to verify the Company’s calculation of, the redemption price.
In the event of redemption of definitive Notes in part only, a new definitive Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The Notes of this series do not have the benefit of any sinking fund obligation and are not subject to repurchase at the option of the Holders.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or premium, if any, or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, or interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, or interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in fully registered form without coupons in denominations of $2,000 and any multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in accordance with the law of the State of New York.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
Date: | Your Signature: |
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee*:
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustees).
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.
The undersigned (check one box below):
¨ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in a Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or |
¨ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
In connection with any transfer of any of the Notes evidenced by this certificate, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ¨ | to the Issuer or subsidiary thereof; or |
(2) | ¨ | under a registration statement that has been declared effective under the Securities Act of 1933, as amended (the “Securities Act”); or |
(3) | ¨ | for so long as the Notes are eligible for resale under Rule 144A, to a person seller reasonably believes is a qualified institutional buyer that is purchasing for its own account or the account of another qualified buyer that is purchasing for its own account or for the account of another qualified institutional buyer and to whom notice is given that the transfer is being made in reliance on Rule 144A; or |
(4) | ¨ | through offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act; or |
(5) | ¨ | under any other available exemption from the registration requirements of the Securities Act. |
Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5) is checked, the Issuer or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer or the Trustee has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
Your Signature | |||
Signature of Signature Guarantee | |||
Date: | |||
|
|||
Signature of Signature Guarantor |
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company, the Issuer and the Subsidiary Guarantors as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: | |
NOTICE: To be executed by an executive officer | |
Name: | |
Title: |
Signature Guarantee*:
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following increases or decreases in this Global Note have been made:
Date of |
Amount of |
Amount of |
Principal |
Signature of |
||||
Exhibit 4.5
COREBRIDGE FINANCIAL, INC.
Third Supplemental
Indenture
Dated as of April 5, 2022
(Supplemental to Indenture Dated as of April 5, 2022)
THE BANK OF NEW YORK MELLON
as Trustee
THIRD SUPPLEMENTAL INDENTURE, dated as of April 5, 2022 (the “Third Supplemental Indenture”), between Corebridge Financial, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), and The Bank of New York Mellon, a New York banking corporation, as Trustee (herein called “Trustee”);
R E C I T A L S:
WHEREAS, the Company has heretofore executed and delivered to the Trustee, an Indenture, dated as of April 5, 2022 (the “Existing Indenture”), providing for the issuance from time to time of the Company’s unsecured debt securities, debentures, notes, bonds or other evidences of indebtedness (herein and therein called the “Securities”), to be issued in one or more series; and the Existing Indenture, as may be amended or supplemented from time to time, including by this Third Supplemental Indenture, is hereinafter referred to as the “Indenture”;
WHEREAS, Section 9.01 of the Existing Indenture permits the Company and the Trustee to enter into an indenture supplemental to the Existing Indenture to establish the form and terms of additional series of Securities;
WHEREAS, Sections 2.01, 3.01 and 9.01 of the Existing Indenture permit the form and the terms of Securities of any additional series of Securities to be established pursuant to an indenture supplemental to the Existing Indenture;
WHEREAS, the Company has authorized the issuance of $1,000,000,000 in aggregate principal amount of its 3.850% Senior Notes due 2029 (the “Notes”);
WHEREAS, the Notes will be established as a series of Securities under the Indenture;
WHEREAS, the Company has duly authorized the execution and delivery of this Third Supplemental Indenture to establish the form and terms of the Notes; and
WHEREAS, all things necessary to make this Third Supplemental Indenture a valid and legally binding agreement according to its terms have been done;
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE
One
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Relation to Existing Indenture
This Third Supplemental Indenture constitutes a part of the Indenture (the provisions of which, as modified by this Third Supplemental Indenture, shall apply to the Notes) in respect of the Notes, and shall not modify, amend or otherwise affect the Existing Indenture insofar as it relates to any other series of Securities or affect in any manner the terms and conditions of the Securities of any other series.
Section 1.2 Definitions
For all purposes of this Third Supplemental Indenture, the capitalized terms used herein (i) which are defined in the recitals or introductory paragraph hereof have the respective meanings assigned thereto in the applicable provision of the recitals and introductory paragraph, and (ii) which are defined in the Existing Indenture (and which are not defined in the recitals or introductory paragraph hereof) have the respective meanings assigned thereto in the Existing Indenture. For all purposes of this Third Supplemental Indenture:
(a) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Third Supplemental Indenture;
(b) The terms “herein”, “hereof”, and “hereunder” and words of similar import refer to this Third Supplemental Indenture; and
(c) The following terms have the meanings set forth below:
“Exchange Notes” means notes issued by the Company hereunder containing terms identical to the Notes (except (i) that interest thereon shall accrue from the last date on which interest was paid on the Notes or, if no such interest has been paid, from the Original Issue Date, (ii) that the legend or legends relating to transferability and other related matters set forth on the Notes, including the Restricted Legend, shall be removed or appropriately altered and (iii) as otherwise set forth herein), to be offered to holders of Notes in exchange for Exchange Notes pursuant to the Exchange Offer.
“Exchange Offer” means a Registered Exchange Offer as defined in the Registration Rights Agreement.
“Original Issue Date” means April 5, 2022.
- 2 - |
“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the Original Issue Date, between the Company and the Representatives.
“Regulation S” means Regulation S as promulgated under the Securities Act.
“Representatives” means J.P Morgan Securities LLC and Citigroup Global Markets Inc., acting as representatives of the several initial purchasers under the Purchase Agreement, dated March 31, 2022, between the Company and the Representatives.
“Rule 144” means Rule 144 promulgated under the Securities Act or any successor provision.
“Restricted Legend” means the legends set forth on Annex A to this Third Supplemental Indenture under the heading “Restricted Legend.”
“Securities Act” means the Securities Act of 1933, as amended.
“Temporary Regulation S Legend” means the third paragraph of the legend set forth on Annex A to this Third Supplemental Indenture under the heading “Temporary Regulation S Legend.”
ARTICLE
Two
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Forms of Notes Generally
The Notes shall be in substantially the forms set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Existing Indenture and this Third Supplemental Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary thereto, or as may, consistent with the Existing Indenture and this Third Supplemental Indenture, be determined by the officers executing such Notes, as evidenced by their execution of such Notes.
The Notes shall be issued initially in the form of the Global Notes, registered in the name of the Depositary or its nominee and deposited with the Trustee, as custodian for the Depositary, for credit by the Depositary to the respective accounts of beneficial owners of the Notes represented thereby (or such other accounts as they may direct). Each such Global Note will constitute a single Security for all purposes of the Indenture.
- 3 - |
Section 2.2 Form of Notes
The Notes shall be in substantially the form of Annex A to this Third Supplemental Indenture.
Section 2.3 Form of Trustee’s Certificate of Authentication of the Notes
The Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON. | ||
As Trustee | ||
By: | ||
Authorized Signatory |
Section 2.4 Title and Terms
Pursuant to Sections 2.01 and 3.01 of the Indenture, there is hereby established a series of Securities, the terms of which shall be as follows:
(a) Designation. The Notes shall be known and designated as the “3.850% Senior Notes due 2029.”
(b) Aggregate Principal Amount. The aggregate principal amount of the Notes that may be authenticated and delivered under this Third Supplemental Indenture is initially limited to $1,000,000,000 except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes issued pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07 or 12.03 of the Existing Indenture. The Company may, without the consent of the Holders of the Notes, issue additional notes of this series in an unlimited amount having the same ranking, interest rate, Stated Maturity, CUSIP and ISIN numbers and terms as to status, redemption or otherwise as the Notes (other than dates as to issuance and the initial accrual of interest), in which event such notes and the Notes shall constitute one series for all purposes under the Indenture, including without limitation, amendments, waivers and redemptions.
(c) Interest and Maturity. The Stated Maturity of the Notes shall be April 5, 2029 and the Notes shall bear interest and have such other terms as are described in the form of Note attached as Annex A to this Third Supplemental Indenture.
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(d) Redemption. The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision, or at the option of a Holder thereof. The Notes shall be redeemable at the election of the Company from time to time, in whole or in part, at the times and at the prices specified in the form of Note attached as Annex A to this Third Supplemental Indenture. Notice of redemption shall be transmitted not less than 5 Business Days nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed at his address appearing in the Security Register.
(e) Defeasance. The Notes shall be subject to the defeasance and discharge provisions of Section 13.02 of the Existing Indenture and the defeasance of certain obligations and certain events of default provisions of Section 13.03 of the Existing Indenture.
(f) Denominations. The Notes shall be issuable only in fully registered form without coupons and only in denominations of $2,000 and multiples of $1,000 in excess thereof.
(g) Authentication and Delivery. The Notes shall be executed, authenticated, delivered and dated in accordance with Section 3.03 of the Existing Indenture.
(h) Depositary. With respect to Notes issuable or issued in whole or in part in the form of one or more Global Notes, the Depositary shall be The Depository Trust Company, for so long as it shall be a clearing agency registered under the Exchange Act, or such successor (which shall be a clearing agency registered under the Exchange Act) as the Company shall designate from time to time in an Officers’ Certificate delivered to the Trustee.
Section 2.5 Exchanges of Global Note for Non-Global Note
Notwithstanding any other provision in this Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Note or a nominee thereof unless (A) such Depositary has notified the Company that it is unwilling or unable or no longer permitted under applicable law to continue as Depositary for such Global Note and the Company does not appoint another institution to act as Depositary within 90 days, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Note, or (C) the Company so directs the Trustee by a Company Order.
Section 2.6 Restricted Legend
(a) Except as otherwise provided in paragraph (d) of this Section 2.6, or Section 2.5, each Note shall bear the legend set forth in Section 2.04 of the Existing Indenture and the Restricted Legend and any temporary Global Security authenticated and delivered for any Notes offered and sold in offshore transactions in reliance on Regulation S shall bear the Temporary Regulation S Legend. Following the expiration of the distribution compliance period set forth in Regulation S with respect to any temporary Global Securities, beneficial interests in such temporary Global Securities shall be exchanged for one or more permanent Global Securities.
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(b) The Notes shall initially be issued in the form of one or more individual Securities registered in the name of the Depositary. Any such Global Securities shall be Global Securities for purposes of the Existing Indenture and shall be subject to the provisions thereof governing Global Securities, except as modified hereby.
(c) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144 without compliance with any limits thereunder and that the Restricted Legend or Temporary Regulation S Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, the Company shall instruct the Trustee in a Company Order to cancel the Note and to authenticate and deliver to the Holder thereof (or to its transferee) a new Note of like tenor and amount of the same series, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend or Temporary Regulation S Legend, and the Trustee, upon receipt of an Officers’ Certificate and an Opinion of Counsel pursuant to Section 1.02 of the Existing Indenture, will comply with such Company Order.
(d) By its acceptance of any Note bearing the Restricted Legend or Temporary Regulation S Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Third Supplemental Indenture and in the Restricted Legend and Temporary Regulation S Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with this Third Supplemental Indenture and such legend.
Section 2.7 Exchange Offer
Upon the occurrence of the Exchange Offer, the Company shall issue and, upon receipt of a Company Order, the Trustee shall authenticate (i) one or more Global Securities without the Restricted Legend or the Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the beneficial interests in the Global Securities with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer and (ii) definitive Notes (if any) without the Restricted Legend or Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the definitive Notes with the Restricted Legend or Temporary Regulations S Legend accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Global Securities with the Restricted Legend or Temporary Regulation S Legend to be reduced accordingly and shall cause any definitive Notes with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer to be cancelled in accordance with Section 3.09 of the Existing Indenture. Any Notes that remain outstanding after the consummation of an Exchange Offer, and Exchange Notes issued in connection with an Exchange Offer, shall be treated as a single class of Notes under this Indenture.
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ARTICLE
Three
MISCELLANEOUS
Section 3.1 Relationship to Existing Indenture
This Third Supplemental Indenture is a supplemental indenture within the meaning of the Existing Indenture. The Existing Indenture, as supplemented and amended by this Third Supplemental Indenture, is in all respects ratified, confirmed and approved and, with respect to the Notes, the Existing Indenture, as supplemented and amended by this Third Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
Section 3.2 Modification of the Existing Indenture
Except as expressly modified by this Third Supplemental Indenture, the provisions of the Existing Indenture shall govern the terms and conditions of the Notes.
Section 3.3 Governing Law
This instrument shall be governed by, and construed in accordance with, the laws of the State of New York.
Section 3.4 Counterparts
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Receipt by telecopy or electronic mail of any executed signature page to this instrument shall constitute effective delivery of such signature page. Electronic signatures may be used in lieu of signatures affixed by hand, and such electronic signature shall have the same validity and effect as signatures affixed by hand.
Section 3.5 Trustee Makes No Representation
The recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Third Supplemental Indenture other than its certificates of authentication.
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In Witness Whereof, the parties hereto have caused this Third Supplemental Indenture to be duly executed all as of the day and year first above written.
COREBRIDGE FINANCIAL, INC. | ||
By: | /s/ Elias Habayeb | |
Name: Elias Habayeb | ||
Title: Executive Vice President and Chief Financial Officer | ||
THE BANK OF NEW YORK MELLON, | ||
as Trustee | ||
By: | /s/ Francine Kincaid | |
Name: Francine Kincaid | ||
Title: Vice President |
[Signature Page to Third Supplemental Indenture]
ANNEX A
FORM OF THE NOTES
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE DEPOSITORY TRUST COMPANY (“DTC”), TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Temporary Regulation S Legend
[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT (AS DEFINED BELOW)) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
Restricted Legend
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S, ONLY (A) TO THE ISSUER, ANY SUBSIDIARY THEREOF OR AIG, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (B) ABOVE OR REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO IN THIS PARAGRAPH. IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
BY ITS ACQUISITION OF THIS NOTE, THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS NOTE CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OF A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (A “COVERED PLAN”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF AN ENTITY OR ACCOUNT WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.
BY ITS ACQUISITION OF THIS NOTE, EACH PURCHASER OF THIS NOTE THAT IS USING ASSETS OF ANY COVERED PLAN TO ACQUIRE OR HOLD THIS NOTE PURSUANT TO THE INITIAL OFFERING WILL BE DEEMED TO REPRESENT THAT NONE OF THE ISSUER, THE INITIAL PURCHASERS OR ANY OF THE ISSUER’S OR THEIR RESPECTIVE AFFILIATES HAS ACTED AS THE COVERED PLAN’S FIDUCIARY, OR HAS BEEN RELIED UPON FOR ANY ADVICE, WITH RESPECT TO THE PURCHASER’S DECISION TO ACQUIRE THE NOTES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC, A NEW YORK CORPORATION, TO COREBRIDGE FINANCIAL, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
COREBRIDGE FINANCIAL, INC.
3.850% SENIOR NOTES DUE 2029
No. [●]
CUSIP No.: [●]
ISIN No.: [●]
COREBRIDGE FINANCIAL, INC., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [●] Dollars ($[●]) on [●], and to pay interest thereon from April 5, 2022 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semiannually in arrears on each April 5 and October 5 (each such date, an “Interest Payment Date”), commencing on October 5, 2022, at the rate of 3.850% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be March 20 or September 20 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a “Special Record Date” for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof which shall be given to Holders of Notes of this series not less than 10 days prior to such “Special Record Date,” all as more fully provided in said Indenture.
Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
In the event that an Interest Payment Date is not a Business Day, the Company shall pay interest on the next succeeding Business Day, with the same force and effect as if made on the Interest Payment Date, and without any interest or other payment with respect to the delay. If the Stated Maturity or earlier Redemption Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the Stated Maturity or earlier Redemption Date, provided that no interest shall accrue for the period from and after such Stated Maturity or earlier Redemption Date.
Payment of the principal of and premium, if any, and interest on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which shall initially be the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, facsimile or electronic signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
COREBRIDGE FINANCIAL, INC. | ||
By: | ||
Name: | ||
Title: |
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON | ||
As Trustee | ||
By: | ||
Authorized Signatory |
[Reverse of the Notes]
This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), designated as its 3.850% Senior Notes due 2029, issued and to be issued in one or more series under an Indenture, dated as of April 5, 2022 (the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof.
Prior to February 5, 2029 (the “Par Call Date”), the Company may redeem the Notes of this series at its option, in whole or in part, at any time and from time to time, upon not less than 5 Business Days nor more than 60 days’ notice given as provided in the Indenture, at a Redemption Price equal to the greater of:
(a) (i) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the Note matures on the Par Call Date) on a semi-annual basis at the Treasury Rate plus 25 basis points (ii) interest accrued to the Redemption Date; and
(b) 100% of the principal amount,
plus, in either case, accrued and unpaid interest thereon to the Redemption Date.
On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date.
The definitions of certain terms used in the paragraph above are listed below.
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Company in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Company after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading).
In determining the Treasury Rate, the Company shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields — one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life — and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 or any successor designation or publication is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date, as applicable. If there is no U.S. Treasury security maturing on the Par Call Date but there are two or more U.S. Treasury securities with a maturity date equally distant from the Par Call Date, one with a maturity date preceding the Par Call Date and one with a maturity date following the Par Call Date , the Company shall select the U.S. Treasury security with a maturity date preceding the Par Call Date. If there are two or more U.S. Treasury securities maturing on the Par Call Date or two or more U.S. Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more U.S. Treasury securities the U.S. Treasury security that is trading closest to par based upon the average of the bid and asked prices for such U.S. Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable U.S. Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
The Trustee shall have no responsibility to calculate, or to verify the Company’s calculation of, the redemption price.
In the event of redemption of definitive Notes in part only, a new definitive Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The Notes of this series do not have the benefit of any sinking fund obligation and are not subject to repurchase at the option of the Holders.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or premium, if any, or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, or interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, or interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in fully registered form without coupons in denominations of $2,000 and any multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in accordance with the law of the State of New York.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
Date: | Your Signature: |
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee*:
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustees).
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.
The undersigned (check one box below):
¨ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in a Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or |
¨ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
In connection with any transfer of any of the Notes evidenced by this certificate, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ¨ | to the Issuer or subsidiary thereof; or | |
(2) | ¨ | under a registration statement that has been declared effective under the Securities Act of 1933, as amended (the “Securities Act”); or | |
(3) | ¨ | for so long as the Notes are eligible for resale under Rule 144A, to a person seller reasonably believes is a qualified institutional buyer that is purchasing for its own account or the account of another qualified buyer that is purchasing for its own account or for the account of another qualified institutional buyer and to whom notice is given that the transfer is being made in reliance on Rule 144A; or | |
(4) | ¨ | through offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act; or | |
(5) | ¨ | under any other available exemption from the registration requirements of the Securities Act. |
Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5) is checked, the Issuer or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer or the Trustee has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
Your Signature |
Signature of Signature Guarantee
Date: |
Signature of Signature Guarantor |
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company, the Issuer and the Subsidiary Guarantors as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: | |
NOTICE: To be executed by an executive officer | |
Name: | |
Title: | |
Signature Guarantee*: |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in Principal Amount of this Global Note |
Amount of increase in Principal Amount of this Global Note |
Principal amount of this Global Note following such decrease or increase |
Signature of authorized signatory of U.S. Trustee or Custodian |
Exhibit 4.6
COREBRIDGE FINANCIAL, INC.
Fourth Supplemental
Indenture
Dated as of April 5, 2022
(Supplemental to Indenture Dated as of April 5, 2022)
THE BANK OF NEW YORK MELLON
as Trustee
FOURTH SUPPLEMENTAL INDENTURE, dated as of April 5, 2022 (the “Fourth Supplemental Indenture”), between Corebridge Financial, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), and The Bank of New York Mellon, a New York banking corporation, as Trustee (herein called “Trustee”);
RECITALS:
WHEREAS, the Company has heretofore executed and delivered to the Trustee, an Indenture, dated as of April 5, 2022 (the “Existing Indenture”), providing for the issuance from time to time of the Company’s unsecured debt securities, debentures, notes, bonds or other evidences of indebtedness (herein and therein called the “Securities”), to be issued in one or more series; and the Existing Indenture, as may be amended or supplemented from time to time, including by this Fourth Supplemental Indenture, is hereinafter referred to as the “Indenture”;
WHEREAS, Section 9.01 of the Existing Indenture permits the Company and the Trustee to enter into an indenture supplemental to the Existing Indenture to establish the form and terms of additional series of Securities;
WHEREAS, Sections 2.01, 3.01 and 9.01 of the Existing Indenture permit the form and the terms of Securities of any additional series of Securities to be established pursuant to an indenture supplemental to the Existing Indenture;
WHEREAS, the Company has authorized the issuance of $1,500,000,000 in aggregate principal amount of its 3.900% Senior Notes due 2032 (the “Notes”);
WHEREAS, the Notes will be established as a series of Securities under the Indenture;
WHEREAS, the Company has duly authorized the execution and delivery of this Fourth Supplemental Indenture to establish the form and terms of the Notes; and
WHEREAS, all things necessary to make this Fourth Supplemental Indenture a valid and legally binding agreement according to its terms have been done;
NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE
One
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Relation to Existing Indenture
This Fourth Supplemental Indenture constitutes a part of the Indenture (the provisions of which, as modified by this Fourth Supplemental Indenture, shall apply to the Notes) in respect of the Notes, and shall not modify, amend or otherwise affect the Existing Indenture insofar as it relates to any other series of Securities or affect in any manner the terms and conditions of the Securities of any other series.
Section 1.2 Definitions
For all purposes of this Fourth Supplemental Indenture, the capitalized terms used herein (i) which are defined in the recitals or introductory paragraph hereof have the respective meanings assigned thereto in the applicable provision of the recitals and introductory paragraph, and (ii) which are defined in the Existing Indenture (and which are not defined in the recitals or introductory paragraph hereof) have the respective meanings assigned thereto in the Existing Indenture. For all purposes of this Fourth Supplemental Indenture:
(a) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Fourth Supplemental Indenture;
(b) The terms “herein”, “hereof”, and “hereunder” and words of similar import refer to this Fourth Supplemental Indenture; and
(c) The following terms have the meanings set forth below:
“Exchange Notes” means notes issued by the Company hereunder containing terms identical to the Notes (except (i) that interest thereon shall accrue from the last date on which interest was paid on the Notes or, if no such interest has been paid, from the Original Issue Date, (ii) that the legend or legends relating to transferability and other related matters set forth on the Notes, including the Restricted Legend, shall be removed or appropriately altered and (iii) as otherwise set forth herein), to be offered to holders of Notes in exchange for Exchange Notes pursuant to the Exchange Offer.
“Exchange Offer” means a Registered Exchange Offer as defined in the Registration Rights Agreement.
“Original Issue Date” means April 5, 2022.
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“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the Original Issue Date, between the Company and the Representatives.
“Regulation S” means Regulation S as promulgated under the Securities Act.
“Representatives” means J.P Morgan Securities LLC and Citigroup Global Markets Inc., acting as representatives of the several initial purchasers under the Purchase Agreement, dated March 31, 2022, between the Company and the Representatives.
“Rule 144” means Rule 144 promulgated under the Securities Act or any successor provision.
“Restricted Legend” means the legends set forth on Annex A to this Fourth Supplemental Indenture under the heading “Restricted Legend.”
“Securities Act” means the Securities Act of 1933, as amended.
“Temporary Regulation S Legend” means the third paragraph of the legend set forth on Annex A to this Fourth Supplemental Indenture under the heading “Temporary Regulation S Legend.”
ARTICLE
Two
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Forms of Notes Generally
The Notes shall be in substantially the forms set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Existing Indenture and this Fourth Supplemental Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary thereto, or as may, consistent with the Existing Indenture and this Fourth Supplemental Indenture, be determined by the officers executing such Notes, as evidenced by their execution of such Notes.
The Notes shall be issued initially in the form of the Global Notes, registered in the name of the Depositary or its nominee and deposited with the Trustee, as custodian for the Depositary, for credit by the Depositary to the respective accounts of beneficial owners of the Notes represented thereby (or such other accounts as they may direct). Each such Global Note will constitute a single Security for all purposes of the Indenture.
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Section 2.2 Form of Notes
The Notes shall be in substantially the form of Annex A to this Fourth Supplemental Indenture.
Section 2.3 Form of Trustee’s Certificate of Authentication of the Notes
The Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON. | ||
As Trustee | ||
By: | ||
Authorized Signatory |
Section 2.4 Title and Terms
Pursuant to Sections 2.01 and 3.01 of the Indenture, there is hereby established a series of Securities, the terms of which shall be as follows:
(a) Designation. The Notes shall be known and designated as the “3.900% Senior Notes due 2032.”
(b) Aggregate Principal Amount. The aggregate principal amount of the Notes that may be authenticated and delivered under this Fourth Supplemental Indenture is initially limited to $1,500,000,000 except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes issued pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07 or 12.03 of the Existing Indenture. The Company may, without the consent of the Holders of the Notes, issue additional notes of this series in an unlimited amount having the same ranking, interest rate, Stated Maturity, CUSIP and ISIN numbers and terms as to status, redemption or otherwise as the Notes (other than dates as to issuance and the initial accrual of interest), in which event such notes and the Notes shall constitute one series for all purposes under the Indenture, including without limitation, amendments, waivers and redemptions.
(c) Interest and Maturity. The Stated Maturity of the Notes shall be April 5, 2032 and the Notes shall bear interest and have such other terms as are described in the form of Note attached as Annex A to this Fourth Supplemental Indenture.
-4- |
(d) Redemption. The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision, or at the option of a Holder thereof. The Notes shall be redeemable at the election of the Company from time to time, in whole or in part, at the times and at the prices specified in the form of Note attached as Annex A to this Fourth Supplemental Indenture. Notice of redemption shall be transmitted not less than 5 Business Days nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed at his address appearing in the Security Register.
(e) Defeasance. The Notes shall be subject to the defeasance and discharge provisions of Section 13.02 of the Existing Indenture and the defeasance of certain obligations and certain events of default provisions of Section 13.03 of the Existing Indenture.
(f) Denominations. The Notes shall be issuable only in fully registered form without coupons and only in denominations of $2,000 and multiples of $1,000 in excess thereof.
(g) Authentication and Delivery. The Notes shall be executed, authenticated, delivered and dated in accordance with Section 3.03 of the Existing Indenture.
(h) Depositary. With respect to Notes issuable or issued in whole or in part in the form of one or more Global Notes, the Depositary shall be The Depository Trust Company, for so long as it shall be a clearing agency registered under the Exchange Act, or such successor (which shall be a clearing agency registered under the Exchange Act) as the Company shall designate from time to time in an Officers’ Certificate delivered to the Trustee.
Section 2.5 Exchanges of Global Note for Non-Global Note
Notwithstanding any other provision in this Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Note or a nominee thereof unless (A) such Depositary has notified the Company that it is unwilling or unable or no longer permitted under applicable law to continue as Depositary for such Global Note and the Company does not appoint another institution to act as Depositary within 90 days, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Note, or (C) the Company so directs the Trustee by a Company Order.
Section 2.6 Restricted Legend
(a) Except as otherwise provided in paragraph (d) of this Section 2.6, or Section 2.5, each Note shall bear the legend set forth in Section 2.04 of the Existing Indenture and the Restricted Legend and any temporary Global Security authenticated and delivered for any Notes offered and sold in offshore transactions in reliance on Regulation S shall bear the Temporary Regulation S Legend. Following the expiration of the distribution compliance period set forth in Regulation S with respect to any temporary Global Securities, beneficial interests in such temporary Global Securities shall be exchanged for one or more permanent Global Securities.
-5- |
(b) The Notes shall initially be issued in the form of one or more individual Securities registered in the name of the Depositary. Any such Global Securities shall be Global Securities for purposes of the Existing Indenture and shall be subject to the provisions thereof governing Global Securities, except as modified hereby.
(c) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144 without compliance with any limits thereunder and that the Restricted Legend or Temporary Regulation S Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, the Company shall instruct the Trustee in a Company Order to cancel the Note and to authenticate and deliver to the Holder thereof (or to its transferee) a new Note of like tenor and amount of the same series, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend or Temporary Regulation S Legend, and the Trustee, upon receipt of an Officers’ Certificate and an Opinion of Counsel pursuant to Section 1.02 of the Existing Indenture, will comply with such Company Order.
(d) By its acceptance of any Note bearing the Restricted Legend or Temporary Regulation S Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Fourth Supplemental Indenture and in the Restricted Legend and Temporary Regulation S Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with this Fourth Supplemental Indenture and such legend.
Section 2.7 Exchange Offer
Upon the occurrence of the Exchange Offer, the Company shall issue and, upon receipt of a Company Order, the Trustee shall authenticate (i) one or more Global Securities without the Restricted Legend or the Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the beneficial interests in the Global Securities with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer and (ii) definitive Notes (if any) without the Restricted Legend or Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the definitive Notes with the Restricted Legend or Temporary Regulations S Legend accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Global Securities with the Restricted Legend or Temporary Regulation S Legend to be reduced accordingly and shall cause any definitive Notes with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer to be cancelled in accordance with Section 3.09 of the Existing Indenture. Any Notes that remain outstanding after the consummation of an Exchange Offer, and Exchange Notes issued in connection with an Exchange Offer, shall be treated as a single class of Notes under this Indenture.
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ARTICLE
Three
MISCELLANEOUS
Section 3.1 Relationship to Existing Indenture
This Fourth Supplemental Indenture is a supplemental indenture within the meaning of the Existing Indenture. The Existing Indenture, as supplemented and amended by this Fourth Supplemental Indenture, is in all respects ratified, confirmed and approved and, with respect to the Notes, the Existing Indenture, as supplemented and amended by this Fourth Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
Section 3.2 Modification of the Existing Indenture
Except as expressly modified by this Fourth Supplemental Indenture, the provisions of the Existing Indenture shall govern the terms and conditions of the Notes.
Section 3.3 Governing Law
This instrument shall be governed by, and construed in accordance with, the laws of the State of New York.
Section 3.4 Counterparts
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Receipt by telecopy or electronic mail of any executed signature page to this instrument shall constitute effective delivery of such signature page. Electronic signatures may be used in lieu of signatures affixed by hand, and such electronic signature shall have the same validity and effect as signatures affixed by hand.
Section 3.5 Trustee Makes No Representation
The recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Fourth Supplemental Indenture other than its certificates of authentication.
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In Witness Whereof, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed all as of the day and year first above written.
COREBRIDGE FINANCIAL, INC. | ||
By: | /s/ Elias Habayeb | |
Name: Elias Habayeb | ||
Title: Executive Vice President and Chief Financial Officer | ||
THE BANK OF NEW YORK MELLON, | ||
as Trustee | ||
By: | /s/ Francine Kincaid | |
Name: Francine Kincaid | ||
Title: Vice President |
[Signature Page to Fourth Supplemental Indenture]
ANNEX A
FORM OF THE NOTES
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE DEPOSITORY TRUST COMPANY (“DTC”), TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Temporary Regulation S Legend
[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT (AS DEFINED BELOW)) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
Restricted Legend
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S, ONLY (A) TO THE ISSUER, ANY SUBSIDIARY THEREOF OR AIG, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (B) ABOVE OR REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO IN THIS PARAGRAPH. IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
BY ITS ACQUISITION OF THIS NOTE, THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS NOTE CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OF A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (A “COVERED PLAN”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF AN ENTITY OR ACCOUNT WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.
BY ITS ACQUISITION OF THIS NOTE, EACH PURCHASER OF THIS NOTE THAT IS USING ASSETS OF ANY COVERED PLAN TO ACQUIRE OR HOLD THIS NOTE PURSUANT TO THE INITIAL OFFERING WILL BE DEEMED TO REPRESENT THAT NONE OF THE ISSUER, THE INITIAL PURCHASERS OR ANY OF THE ISSUER’S OR THEIR RESPECTIVE AFFILIATES HAS ACTED AS THE COVERED PLAN’S FIDUCIARY, OR HAS BEEN RELIED UPON FOR ANY ADVICE, WITH RESPECT TO THE PURCHASER’S DECISION TO ACQUIRE THE NOTES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC, A NEW YORK CORPORATION, TO COREBRIDGE FINANCIAL, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
COREBRIDGE FINANCIAL, INC.
3.900% SENIOR NOTES DUE 2032
No. [●]
CUSIP No.: [●]
ISIN No.: [●]
COREBRIDGE FINANCIAL, INC., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [●] Dollars ($[●]) on [●], and to pay interest thereon from April 5, 2022 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semiannually in arrears on each April 5 and October 5 (each such date, an “Interest Payment Date”), commencing on October 5, 2022, at the rate of 3.900% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be March 20 or September 20 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a “Special Record Date” for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof which shall be given to Holders of Notes of this series not less than 10 days prior to such “Special Record Date,” all as more fully provided in said Indenture.
Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
In the event that an Interest Payment Date is not a Business Day, the Company shall pay interest on the next succeeding Business Day, with the same force and effect as if made on the Interest Payment Date, and without any interest or other payment with respect to the delay. If the Stated Maturity or earlier Redemption Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the Stated Maturity or earlier Redemption Date, provided that no interest shall accrue for the period from and after such Stated Maturity or earlier Redemption Date.
Payment of the principal of and premium, if any, and interest on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which shall initially be the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, facsimile or electronic signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
COREBRIDGE FINANCIAL, INC. | ||
By: | ||
Name: | ||
Title: |
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON | ||
As Trustee | ||
By: | ||
Authorized Signatory |
[Reverse of the Notes]
This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), designated as its 3.900% Senior Notes due 2032, issued and to be issued in one or more series under an Indenture, dated as of April 5, 2022 (the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof.
Prior to January 5, 2032 (the “Par Call Date”), the Company may redeem the Notes of this series at its option, in whole or in part, at any time and from time to time, upon not less than 5 Business Days nor more than 60 days’ notice given as provided in the Indenture, at a Redemption Price equal to the greater of:
(a) (i) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the Note matures on the Par Call Date) on a semi-annual basis at the Treasury Rate plus 25 basis points (ii) interest accrued to the Redemption Date; and
(b) 100% of the principal amount,
plus, in either case, accrued and unpaid interest thereon to the Redemption Date.
On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date.
The definitions of certain terms used in the paragraph above are listed below.
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Company in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Company after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading).
In determining the Treasury Rate, the Company shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields — one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life — and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 or any successor designation or publication is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date, as applicable. If there is no U.S. Treasury security maturing on the Par Call Date but there are two or more U.S. Treasury securities with a maturity date equally distant from the Par Call Date, one with a maturity date preceding the Par Call Date and one with a maturity date following the Par Call Date , the Company shall select the U.S. Treasury security with a maturity date preceding the Par Call Date. If there are two or more U.S. Treasury securities maturing on the Par Call Date or two or more U.S. Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more U.S. Treasury securities the U.S. Treasury security that is trading closest to par based upon the average of the bid and asked prices for such U.S. Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable U.S. Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
The Trustee shall have no responsibility to calculate, or to verify the Company’s calculation of, the redemption price.
In the event of redemption of definitive Notes in part only, a new definitive Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The Notes of this series do not have the benefit of any sinking fund obligation and are not subject to repurchase at the option of the Holders.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or premium, if any, or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, or interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, or interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in fully registered form without coupons in denominations of $2,000 and any multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in accordance with the law of the State of New York.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
Date: | Your Signature: |
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee*:
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustees).
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.
The undersigned (check one box below):
¨ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in a Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or |
¨ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
In connection with any transfer of any of the Notes evidenced by this certificate, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ¨ | to the Issuer or subsidiary thereof; or |
(2) | ¨ | under a registration statement that has been declared effective under the Securities Act of 1933, as amended (the “Securities Act”); or |
(3) | ¨ | for so long as the Notes are eligible for resale under Rule 144A, to a person seller reasonably believes is a qualified institutional buyer that is purchasing for its own account or the account of another qualified buyer that is purchasing for its own account or for the account of another qualified institutional buyer and to whom notice is given that the transfer is being made in reliance on Rule 144A; or |
(4) | ¨ | through offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act; or |
(5) | ¨ | under any other available exemption from the registration requirements of the Securities Act. |
Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5) is checked, the Issuer or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer or the Trustee has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
Your Signature | |||
Signature of Signature Guarantee | |||
Date: | |||
Signature of Signature Guarantor |
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company, the Issuer and the Subsidiary Guarantors as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: | |
NOTICE: To be executed by an executive officer | |
Name: | |
Title: |
Signature Guarantee*:
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following increases or decreases in this Global Note have been made:
Date of |
Amount of |
Amount of |
Principal |
Signature of |
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Exhibit 4.7
COREBRIDGE FINANCIAL, INC.
Fifth Supplemental
Indenture
Dated as of April 5, 2022
(Supplemental to Indenture Dated as of April 5, 2022)
THE BANK OF NEW YORK MELLON
as Trustee
FIFTH SUPPLEMENTAL INDENTURE, dated as of April 5, 2022 (the “Fifth Supplemental Indenture”), between Corebridge Financial, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), and The Bank of New York Mellon, a New York banking corporation, as Trustee (herein called “Trustee”);
R E C I T A L S:
WHEREAS, the Company has heretofore executed and delivered to the Trustee, an Indenture, dated as of April 5, 2022 (the “Existing Indenture”), providing for the issuance from time to time of the Company’s unsecured debt securities, debentures, notes, bonds or other evidences of indebtedness (herein and therein called the “Securities”), to be issued in one or more series; and the Existing Indenture, as may be amended or supplemented from time to time, including by this Fifth Supplemental Indenture, is hereinafter referred to as the “Indenture”;
WHEREAS, Section 9.01 of the Existing Indenture permits the Company and the Trustee to enter into an indenture supplemental to the Existing Indenture to establish the form and terms of additional series of Securities;
WHEREAS, Sections 2.01, 3.01 and 9.01 of the Existing Indenture permit the form and the terms of Securities of any additional series of Securities to be established pursuant to an indenture supplemental to the Existing Indenture;
WHEREAS, the Company has authorized the issuance of $500,000,000 in aggregate principal amount of its 4.350% Senior Notes due 2042 (the “Notes”);
WHEREAS, the Notes will be established as a series of Securities under the Indenture;
WHEREAS, the Company has duly authorized the execution and delivery of this Fifth Supplemental Indenture to establish the form and terms of the Notes; and
WHEREAS, all things necessary to make this Fifth Supplemental Indenture a valid and legally binding agreement according to its terms have been done;
NOW, THEREFORE, THIS FIFTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE
One
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Relation to Existing Indenture
This Fifth Supplemental Indenture constitutes a part of the Indenture (the provisions of which, as modified by this Fifth Supplemental Indenture, shall apply to the Notes) in respect of the Notes, and shall not modify, amend or otherwise affect the Existing Indenture insofar as it relates to any other series of Securities or affect in any manner the terms and conditions of the Securities of any other series.
Section 1.2 Definitions
For all purposes of this Fifth Supplemental Indenture, the capitalized terms used herein (i) which are defined in the recitals or introductory paragraph hereof have the respective meanings assigned thereto in the applicable provision of the recitals and introductory paragraph, and (ii) which are defined in the Existing Indenture (and which are not defined in the recitals or introductory paragraph hereof) have the respective meanings assigned thereto in the Existing Indenture. For all purposes of this Fifth Supplemental Indenture:
(a) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Fifth Supplemental Indenture;
(b) The terms “herein”, “hereof”, and “hereunder” and words of similar import refer to this Fifth Supplemental Indenture; and
(c) The following terms have the meanings set forth below:
“Exchange Notes” means notes issued by the Company hereunder containing terms identical to the Notes (except (i) that interest thereon shall accrue from the last date on which interest was paid on the Notes or, if no such interest has been paid, from the Original Issue Date, (ii) that the legend or legends relating to transferability and other related matters set forth on the Notes, including the Restricted Legend, shall be removed or appropriately altered and (iii) as otherwise set forth herein), to be offered to holders of Notes in exchange for Exchange Notes pursuant to the Exchange Offer.
“Exchange Offer” means a Registered Exchange Offer as defined in the Registration Rights Agreement.
“Original Issue Date” means April 5, 2022.
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“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the Original Issue Date, between the Company and the Representatives.
“Regulation S” means Regulation S as promulgated under the Securities Act.
“Representatives” means J.P Morgan Securities LLC and Citigroup Global Markets Inc., acting as representatives of the several initial purchasers under the Purchase Agreement, dated March 31, 2022, between the Company and the Representatives.
“Rule 144” means Rule 144 promulgated under the Securities Act or any successor provision.
“Restricted Legend” means the legends set forth on Annex A to this Fifth Supplemental Indenture under the heading “Restricted Legend.”
“Securities Act” means the Securities Act of 1933, as amended.
“Temporary Regulation S Legend” means the third paragraph of the legend set forth on Annex A to this Fifth Supplemental Indenture under the heading “Temporary Regulation S Legend.”
ARTICLE
Two
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Forms of Notes Generally
The Notes shall be in substantially the forms set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Existing Indenture and this Fifth Supplemental Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary thereto, or as may, consistent with the Existing Indenture and this Fifth Supplemental Indenture, be determined by the officers executing such Notes, as evidenced by their execution of such Notes.
The Notes shall be issued initially in the form of the Global Notes, registered in the name of the Depositary or its nominee and deposited with the Trustee, as custodian for the Depositary, for credit by the Depositary to the respective accounts of beneficial owners of the Notes represented thereby (or such other accounts as they may direct). Each such Global Note will constitute a single Security for all purposes of the Indenture.
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Section 2.2 Form of Notes
The Notes shall be in substantially the form of Annex A to this Fifth Supplemental Indenture.
Section 2.3 Form of Trustee’s Certificate of Authentication of the Notes
The Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON. | ||
As Trustee | ||
By: | ||
Authorized Signatory |
Section 2.4 Title and Terms
Pursuant to Sections 2.01 and 3.01 of the Indenture, there is hereby established a series of Securities, the terms of which shall be as follows:
(a) Designation. The Notes shall be known and designated as the “4.350% Senior Notes due 2042.”
(b) Aggregate Principal Amount. The aggregate principal amount of the Notes that may be authenticated and delivered under this Fifth Supplemental Indenture is initially limited to $500,000,000 except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes issued pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07 or 12.03 of the Existing Indenture. The Company may, without the consent of the Holders of the Notes, issue additional notes of this series in an unlimited amount having the same ranking, interest rate, Stated Maturity, CUSIP and ISIN numbers and terms as to status, redemption or otherwise as the Notes (other than dates as to issuance and the initial accrual of interest), in which event such notes and the Notes shall constitute one series for all purposes under the Indenture, including without limitation, amendments, waivers and redemptions.
(c) Interest and Maturity. The Stated Maturity of the Notes shall be April 5, 2042 and the Notes shall bear interest and have such other terms as are described in the form of Note attached as Annex A to this Fifth Supplemental Indenture.
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(d) Redemption. The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision, or at the option of a Holder thereof. The Notes shall be redeemable at the election of the Company from time to time, in whole or in part, at the times and at the prices specified in the form of Note attached as Annex A to this Fifth Supplemental Indenture. Notice of redemption shall be transmitted not less than 5 Business Days nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed at his address appearing in the Security Register.
(e) Defeasance. The Notes shall be subject to the defeasance and discharge provisions of Section 13.02 of the Existing Indenture and the defeasance of certain obligations and certain events of default provisions of Section 13.03 of the Existing Indenture.
(f) Denominations. The Notes shall be issuable only in fully registered form without coupons and only in denominations of $2,000 and multiples of $1,000 in excess thereof.
(g) Authentication and Delivery. The Notes shall be executed, authenticated, delivered and dated in accordance with Section 3.03 of the Existing Indenture.
(h) Depositary. With respect to Notes issuable or issued in whole or in part in the form of one or more Global Notes, the Depositary shall be The Depository Trust Company, for so long as it shall be a clearing agency registered under the Exchange Act, or such successor (which shall be a clearing agency registered under the Exchange Act) as the Company shall designate from time to time in an Officers’ Certificate delivered to the Trustee.
Section 2.5 Exchanges of Global Note for Non-Global Note
Notwithstanding any other provision in this Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Note or a nominee thereof unless (A) such Depositary has notified the Company that it is unwilling or unable or no longer permitted under applicable law to continue as Depositary for such Global Note and the Company does not appoint another institution to act as Depositary within 90 days, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Note, or (C) the Company so directs the Trustee by a Company Order.
Section 2.6 Restricted Legend
(a) Except as otherwise provided in paragraph (d) of this Section 2.6, or Section 2.5, each Note shall bear the legend set forth in Section 2.04 of the Existing Indenture and the Restricted Legend and any temporary Global Security authenticated and delivered for any Notes offered and sold in offshore transactions in reliance on Regulation S shall bear the Temporary Regulation S Legend. Following the expiration of the distribution compliance period set forth in Regulation S with respect to any temporary Global Securities, beneficial interests in such temporary Global Securities shall be exchanged for one or more permanent Global Securities.
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(b) The Notes shall initially be issued in the form of one or more individual Securities registered in the name of the Depositary. Any such Global Securities shall be Global Securities for purposes of the Existing Indenture and shall be subject to the provisions thereof governing Global Securities, except as modified hereby.
(c) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144 without compliance with any limits thereunder and that the Restricted Legend or Temporary Regulation S Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, the Company shall instruct the Trustee in a Company Order to cancel the Note and to authenticate and deliver to the Holder thereof (or to its transferee) a new Note of like tenor and amount of the same series, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend or Temporary Regulation S Legend, and the Trustee, upon receipt of an Officers’ Certificate and an Opinion of Counsel pursuant to Section 1.02 of the Existing Indenture, will comply with such Company Order.
(d) By its acceptance of any Note bearing the Restricted Legend or Temporary Regulation S Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Fifth Supplemental Indenture and in the Restricted Legend and Temporary Regulation S Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with this Fifth Supplemental Indenture and such legend.
Section 2.7 Exchange Offer
Upon the occurrence of the Exchange Offer, the Company shall issue and, upon receipt of a Company Order, the Trustee shall authenticate (i) one or more Global Securities without the Restricted Legend or the Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the beneficial interests in the Global Securities with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer and (ii) definitive Notes (if any) without the Restricted Legend or Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the definitive Notes with the Restricted Legend or Temporary Regulations S Legend accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Global Securities with the Restricted Legend or Temporary Regulation S Legend to be reduced accordingly and shall cause any definitive Notes with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer to be cancelled in accordance with Section 3.09 of the Existing Indenture. Any Notes that remain outstanding after the consummation of an Exchange Offer, and Exchange Notes issued in connection with an Exchange Offer, shall be treated as a single class of Notes under this Indenture.
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ARTICLE
Three
MISCELLANEOUS
Section 3.1 Relationship to Existing Indenture
This Fifth Supplemental Indenture is a supplemental indenture within the meaning of the Existing Indenture. The Existing Indenture, as supplemented and amended by this Fifth Supplemental Indenture, is in all respects ratified, confirmed and approved and, with respect to the Notes, the Existing Indenture, as supplemented and amended by this Fifth Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
Section 3.2 Modification of the Existing Indenture
Except as expressly modified by this Fifth Supplemental Indenture, the provisions of the Existing Indenture shall govern the terms and conditions of the Notes.
Section 3.3 Governing Law
This instrument shall be governed by, and construed in accordance with, the laws of the State of New York.
Section 3.4 Counterparts
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Receipt by telecopy or electronic mail of any executed signature page to this instrument shall constitute effective delivery of such signature page. Electronic signatures may be used in lieu of signatures affixed by hand, and such electronic signature shall have the same validity and effect as signatures affixed by hand.
Section 3.5 Trustee Makes No Representation
The recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Fifth Supplemental Indenture other than its certificates of authentication.
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In Witness Whereof, the parties hereto have caused this Fifth Supplemental Indenture to be duly executed all as of the day and year first above written.
COREBRIDGE FINANCIAL, INC. | ||
By: | /s/ Elias Habayeb | |
Name: Elias Habayeb | ||
Title: Executive Vice President and Chief Financial Officer | ||
THE BANK OF NEW YORK MELLON, | ||
as Trustee | ||
By: | /s/ Francine Kincaid | |
Name: Francine Kincaid | ||
Title: Vice President |
[Signature Page to Fifth Supplemental Indenture]
ANNEX A
FORM OF THE NOTES
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE DEPOSITORY TRUST COMPANY (“DTC”), TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Temporary Regulation S Legend
[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT (AS DEFINED BELOW)) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
Restricted Legend
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S, ONLY (A) TO THE ISSUER, ANY SUBSIDIARY THEREOF OR AIG, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (B) ABOVE OR REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO IN THIS PARAGRAPH. IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
BY ITS ACQUISITION OF THIS NOTE, THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS NOTE CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OF A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (A “COVERED PLAN”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF AN ENTITY OR ACCOUNT WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.
BY ITS ACQUISITION OF THIS NOTE, EACH PURCHASER OF THIS NOTE THAT IS USING ASSETS OF ANY COVERED PLAN TO ACQUIRE OR HOLD THIS NOTE PURSUANT TO THE INITIAL OFFERING WILL BE DEEMED TO REPRESENT THAT NONE OF THE ISSUER, THE INITIAL PURCHASERS OR ANY OF THE ISSUER’S OR THEIR RESPECTIVE AFFILIATES HAS ACTED AS THE COVERED PLAN’S FIDUCIARY, OR HAS BEEN RELIED UPON FOR ANY ADVICE, WITH RESPECT TO THE PURCHASER’S DECISION TO ACQUIRE THE NOTES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC, A NEW YORK CORPORATION, TO COREBRIDGE FINANCIAL, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
COREBRIDGE FINANCIAL, INC.
4.350% SENIOR NOTES DUE 2042
No. [●]
CUSIP No.: [●]
ISIN No.: [●]
COREBRIDGE FINANCIAL, INC., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [●] Dollars ($[●]) on [●], and to pay interest thereon from April 5, 2022 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semiannually in arrears on each April 5 and October 5 (each such date, an “Interest Payment Date”), commencing on October 5, 2022, at the rate of 4.350% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be March 20 or September 20 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a “Special Record Date” for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof which shall be given to Holders of Notes of this series not less than 10 days prior to such “Special Record Date,” all as more fully provided in said Indenture.
Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
In the event that an Interest Payment Date is not a Business Day, the Company shall pay interest on the next succeeding Business Day, with the same force and effect as if made on the Interest Payment Date, and without any interest or other payment with respect to the delay. If the Stated Maturity or earlier Redemption Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the Stated Maturity or earlier Redemption Date, provided that no interest shall accrue for the period from and after such Stated Maturity or earlier Redemption Date.
Payment of the principal of and premium, if any, and interest on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which shall initially be the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, facsimile or electronic signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
COREBRIDGE FINANCIAL, INC. | ||
By: | ||
Name: | ||
Title: |
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON | ||
As Trustee | ||
By: | ||
Authorized Signatory |
[Reverse of the Notes]
This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), designated as its 4.350% Senior Notes due 2042, issued and to be issued in one or more series under an Indenture, dated as of April 5, 2022 (the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof.
Prior to October 5, 2041 (the “Par Call Date”), the Company may redeem the Notes of this series at its option, in whole or in part, at any time and from time to time, upon not less than 5 Business Days nor more than 60 days’ notice given as provided in the Indenture, at a Redemption Price equal to the greater of:
(a) (i) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the Note matures on the Par Call Date) on a semi-annual basis at the Treasury Rate plus 30 basis points (ii) interest accrued to the Redemption Date; and
(b) 100% of the principal amount,
plus, in either case, accrued and unpaid interest thereon to the Redemption Date.
On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date.
The definitions of certain terms used in the paragraph above are listed below.
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Company in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Company after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading).
In determining the Treasury Rate, the Company shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields — one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life — and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 or any successor designation or publication is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date, as applicable. If there is no U.S. Treasury security maturing on the Par Call Date but there are two or more U.S. Treasury securities with a maturity date equally distant from the Par Call Date, one with a maturity date preceding the Par Call Date and one with a maturity date following the Par Call Date , the Company shall select the U.S. Treasury security with a maturity date preceding the Par Call Date. If there are two or more U.S. Treasury securities maturing on the Par Call Date or two or more U.S. Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more U.S. Treasury securities the U.S. Treasury security that is trading closest to par based upon the average of the bid and asked prices for such U.S. Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable U.S. Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
The Trustee shall have no responsibility to calculate, or to verify the Company’s calculation of, the redemption price.
In the event of redemption of definitive Notes in part only, a new definitive Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The Notes of this series do not have the benefit of any sinking fund obligation and are not subject to repurchase at the option of the Holders.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or premium, if any, or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, or interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, or interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in fully registered form without coupons in denominations of $2,000 and any multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in accordance with the law of the State of New York.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
Date: | Your Signature: |
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee*:
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustees).
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.
The undersigned (check one box below):
¨ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in a Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or |
¨ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
In connection with any transfer of any of the Notes evidenced by this certificate, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ¨ | to the Issuer or subsidiary thereof; or | |
(2) | ¨ | under a registration statement that has been declared effective under the Securities Act of 1933, as amended (the “Securities Act”); or | |
(3) | ¨ | for so long as the Notes are eligible for resale under Rule 144A, to a person seller reasonably believes is a qualified institutional buyer that is purchasing for its own account or the account of another qualified buyer that is purchasing for its own account or for the account of another qualified institutional buyer and to whom notice is given that the transfer is being made in reliance on Rule 144A; or | |
(4) | ¨ | through offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act; or | |
(5) | ¨ | under any other available exemption from the registration requirements of the Securities Act. |
Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5) is checked, the Issuer or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer or the Trustee has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
Your Signature |
Signature of Signature Guarantee
Date: |
Signature of Signature Guarantor |
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company, the Issuer and the Subsidiary Guarantors as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: | |
NOTICE: To be executed by an executive officer | |
Name: | |
Title: | |
Signature Guarantee*: |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in Principal Amount of this Global Note |
Amount of increase in Principal Amount of this Global Note |
Principal amount of this Global Note following such decrease or increase |
Signature of authorized signatory of U.S. Trustee or Custodian |
Exhibit 4.8
COREBRIDGE FINANCIAL, INC.
Sixth Supplemental
Indenture
Dated as of April 5, 2022
(Supplemental to Indenture Dated as of April 5, 2022)
THE BANK OF NEW YORK MELLON
as Trustee
SIXTH SUPPLEMENTAL INDENTURE, dated as of April 5, 2022 (the “Sixth Supplemental Indenture”), between Corebridge Financial, Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”), and The Bank of New York Mellon, a New York banking corporation, as Trustee (herein called “Trustee”);
R E C I T A L S:
WHEREAS, the Company has heretofore executed and delivered to the Trustee, an Indenture, dated as of April 5, 2022 (the “Existing Indenture”), providing for the issuance from time to time of the Company’s unsecured debt securities, debentures, notes, bonds or other evidences of indebtedness (herein and therein called the “Securities”), to be issued in one or more series; and the Existing Indenture, as may be amended or supplemented from time to time, including by this Sixth Supplemental Indenture, is hereinafter referred to as the “Indenture”;
WHEREAS, Section 9.01 of the Existing Indenture permits the Company and the Trustee to enter into an indenture supplemental to the Existing Indenture to establish the form and terms of additional series of Securities;
WHEREAS, Sections 2.01, 3.01 and 9.01 of the Existing Indenture permit the form and the terms of Securities of any additional series of Securities to be established pursuant to an indenture supplemental to the Existing Indenture;
WHEREAS, the Company has authorized the issuance of $1,250,000,000 in aggregate principal amount of its 4.400% Senior Notes due 2052 (the “Notes”);
WHEREAS, the Notes will be established as a series of Securities under the Indenture;
WHEREAS, the Company has duly authorized the execution and delivery of this Sixth Supplemental Indenture to establish the form and terms of the Notes; and
WHEREAS, all things necessary to make this Sixth Supplemental Indenture a valid and legally binding agreement according to its terms have been done;
NOW, THEREFORE, THIS SIXTH SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE
One
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1 Relation to Existing Indenture
This Sixth Supplemental Indenture constitutes a part of the Indenture (the provisions of which, as modified by this Sixth Supplemental Indenture, shall apply to the Notes) in respect of the Notes, and shall not modify, amend or otherwise affect the Existing Indenture insofar as it relates to any other series of Securities or affect in any manner the terms and conditions of the Securities of any other series.
Section 1.2 Definitions
For all purposes of this Sixth Supplemental Indenture, the capitalized terms used herein (i) which are defined in the recitals or introductory paragraph hereof have the respective meanings assigned thereto in the applicable provision of the recitals and introductory paragraph, and (ii) which are defined in the Existing Indenture (and which are not defined in the recitals or introductory paragraph hereof) have the respective meanings assigned thereto in the Existing Indenture. For all purposes of this Sixth Supplemental Indenture:
(a) All references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Sixth Supplemental Indenture;
(b) The terms “herein”, “hereof”, and “hereunder” and words of similar import refer to this Sixth Supplemental Indenture; and
(c) The following terms have the meanings set forth below:
“Exchange Notes” means notes issued by the Company hereunder containing terms identical to the Notes (except (i) that interest thereon shall accrue from the last date on which interest was paid on the Notes or, if no such interest has been paid, from the Original Issue Date, (ii) that the legend or legends relating to transferability and other related matters set forth on the Notes, including the Restricted Legend, shall be removed or appropriately altered and (iii) as otherwise set forth herein), to be offered to holders of Notes in exchange for Exchange Notes pursuant to the Exchange Offer.
“Exchange Offer” means a Registered Exchange Offer as defined in the Registration Rights Agreement.
“Original Issue Date” means April 5, 2022.
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“Registration Rights Agreement” means the Registration Rights Agreement, dated as of the Original Issue Date, between the Company and the Representatives.
“Regulation S” means Regulation S as promulgated under the Securities Act.
“Representatives” means J.P Morgan Securities LLC and Citigroup Global Markets Inc., acting as representatives of the several initial purchasers under the Purchase Agreement, dated March 31, 2022, between the Company and the Representatives.
“Rule 144” means Rule 144 promulgated under the Securities Act or any successor provision.
“Restricted Legend” means the legends set forth on Annex A to this Sixth Supplemental Indenture under the heading “Restricted Legend.”
“Securities Act” means the Securities Act of 1933, as amended.
“Temporary Regulation S Legend” means the third paragraph of the legend set forth on Annex A to this Sixth Supplemental Indenture under the heading “Temporary Regulation S Legend.”
ARTICLE
Two
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 2.1 Forms of Notes Generally
The Notes shall be in substantially the forms set forth in this Article with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by the Existing Indenture and this Sixth Supplemental Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or Depositary thereto, or as may, consistent with the Existing Indenture and this Sixth Supplemental Indenture, be determined by the officers executing such Notes, as evidenced by their execution of such Notes.
The Notes shall be issued initially in the form of the Global Notes, registered in the name of the Depositary or its nominee and deposited with the Trustee, as custodian for the Depositary, for credit by the Depositary to the respective accounts of beneficial owners of the Notes represented thereby (or such other accounts as they may direct). Each such Global Note will constitute a single Security for all purposes of the Indenture.
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Section 2.2 Form of Notes
The Notes shall be in substantially the form of Annex A to this Sixth Supplemental Indenture.
Section 2.3 Form of Trustee’s Certificate of Authentication of the Notes
The Trustee’s certificates of authentication shall be in substantially the following form:
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON. | ||
As Trustee | ||
By: | ||
Authorized Signatory |
Section 2.4 Title and Terms
Pursuant to Sections 2.01 and 3.01 of the Indenture, there is hereby established a series of Securities, the terms of which shall be as follows:
(a) Designation. The Notes shall be known and designated as the “4.400% Senior Notes due 2052.”
(b) Aggregate Principal Amount. The aggregate principal amount of the Notes that may be authenticated and delivered under this Sixth Supplemental Indenture is initially limited to $1,250,000,000 except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes issued pursuant to Section 3.04, 3.05, 3.06, 9.06, 11.07 or 12.03 of the Existing Indenture. The Company may, without the consent of the Holders of the Notes, issue additional notes of this series in an unlimited amount having the same ranking, interest rate, Stated Maturity, CUSIP and ISIN numbers and terms as to status, redemption or otherwise as the Notes (other than dates as to issuance and the initial accrual of interest), in which event such notes and the Notes shall constitute one series for all purposes under the Indenture, including without limitation, amendments, waivers and redemptions.
(c) Interest and Maturity. The Stated Maturity of the Notes shall be April 5, 2052 and the Notes shall bear interest and have such other terms as are described in the form of Note attached as Annex A to this Sixth Supplemental Indenture.
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(d) Redemption. The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision, or at the option of a Holder thereof. The Notes shall be redeemable at the election of the Company from time to time, in whole or in part, at the times and at the prices specified in the form of Note attached as Annex A to this Sixth Supplemental Indenture. Notice of redemption shall be transmitted not less than 5 Business Days nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed at his address appearing in the Security Register.
(e) Defeasance. The Notes shall be subject to the defeasance and discharge provisions of Section 13.02 of the Existing Indenture and the defeasance of certain obligations and certain events of default provisions of Section 13.03 of the Existing Indenture.
(f) Denominations. The Notes shall be issuable only in fully registered form without coupons and only in denominations of $2,000 and multiples of $1,000 in excess thereof.
(g) Authentication and Delivery. The Notes shall be executed, authenticated, delivered and dated in accordance with Section 3.03 of the Existing Indenture.
(h) Depositary. With respect to Notes issuable or issued in whole or in part in the form of one or more Global Notes, the Depositary shall be The Depository Trust Company, for so long as it shall be a clearing agency registered under the Exchange Act, or such successor (which shall be a clearing agency registered under the Exchange Act) as the Company shall designate from time to time in an Officers’ Certificate delivered to the Trustee.
Section 2.5 Exchanges of Global Note for Non-Global Note
Notwithstanding any other provision in this Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Note or a nominee thereof unless (A) such Depositary has notified the Company that it is unwilling or unable or no longer permitted under applicable law to continue as Depositary for such Global Note and the Company does not appoint another institution to act as Depositary within 90 days, (B) there shall have occurred and be continuing an Event of Default with respect to such Global Note, or (C) the Company so directs the Trustee by a Company Order.
Section 2.6 Restricted Legend
(a) Except as otherwise provided in paragraph (d) of this Section 2.6, or Section 2.5, each Note shall bear the legend set forth in Section 2.04 of the Existing Indenture and the Restricted Legend and any temporary Global Security authenticated and delivered for any Notes offered and sold in offshore transactions in reliance on Regulation S shall bear the Temporary Regulation S Legend. Following the expiration of the distribution compliance period set forth in Regulation S with respect to any temporary Global Securities, beneficial interests in such temporary Global Securities shall be exchanged for one or more permanent Global Securities.
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(b) The Notes shall initially be issued in the form of one or more individual Securities registered in the name of the Depositary. Any such Global Securities shall be Global Securities for purposes of the Existing Indenture and shall be subject to the provisions thereof governing Global Securities, except as modified hereby.
(c) If the Company determines (upon the advice of counsel and such other certifications and evidence as the Company may reasonably require) that a Note is eligible for resale pursuant to Rule 144 without compliance with any limits thereunder and that the Restricted Legend or Temporary Regulation S Legend is no longer necessary or appropriate in order to ensure that subsequent transfers of the Note (or a beneficial interest therein) are effected in compliance with the Securities Act, the Company shall instruct the Trustee in a Company Order to cancel the Note and to authenticate and deliver to the Holder thereof (or to its transferee) a new Note of like tenor and amount of the same series, registered in the name of the Holder thereof (or its transferee), that does not bear the Restricted Legend or Temporary Regulation S Legend, and the Trustee, upon receipt of an Officers’ Certificate and an Opinion of Counsel pursuant to Section 1.02 of the Existing Indenture, will comply with such Company Order.
(d) By its acceptance of any Note bearing the Restricted Legend or Temporary Regulation S Legend (or any beneficial interest in such a Note), each Holder thereof and each owner of a beneficial interest therein acknowledges the restrictions on transfer of such Note (and any such beneficial interest) set forth in this Sixth Supplemental Indenture and in the Restricted Legend and Temporary Regulation S Legend and agrees that it will transfer such Note (and any such beneficial interest) only in accordance with this Sixth Supplemental Indenture and such legend.
Section 2.7 Exchange Offer
Upon the occurrence of the Exchange Offer, the Company shall issue and, upon receipt of a Company Order, the Trustee shall authenticate (i) one or more Global Securities without the Restricted Legend or the Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the beneficial interests in the Global Securities with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer and (ii) definitive Notes (if any) without the Restricted Legend or Temporary Regulation S Legend in an aggregate principal amount equal to the principal amount of the definitive Notes with the Restricted Legend or Temporary Regulations S Legend accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Global Securities with the Restricted Legend or Temporary Regulation S Legend to be reduced accordingly and shall cause any definitive Notes with the Restricted Legend or Temporary Regulation S Legend accepted for exchange in the Exchange Offer to be cancelled in accordance with Section 3.09 of the Existing Indenture. Any Notes that remain outstanding after the consummation of an Exchange Offer, and Exchange Notes issued in connection with an Exchange Offer, shall be treated as a single class of Notes under this Indenture.
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ARTICLE
Three
MISCELLANEOUS
Section 3.1 Relationship to Existing Indenture
This Sixth Supplemental Indenture is a supplemental indenture within the meaning of the Existing Indenture. The Existing Indenture, as supplemented and amended by this Sixth Supplemental Indenture, is in all respects ratified, confirmed and approved and, with respect to the Notes, the Existing Indenture, as supplemented and amended by this Sixth Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
Section 3.2 Modification of the Existing Indenture
Except as expressly modified by this Sixth Supplemental Indenture, the provisions of the Existing Indenture shall govern the terms and conditions of the Notes.
Section 3.3 Governing Law
This instrument shall be governed by, and construed in accordance with, the laws of the State of New York.
Section 3.4 Counterparts
This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Receipt by telecopy or electronic mail of any executed signature page to this instrument shall constitute effective delivery of such signature page. Electronic signatures may be used in lieu of signatures affixed by hand, and such electronic signature shall have the same validity and effect as signatures affixed by hand.
Section 3.5 Trustee Makes No Representation
The recitals contained herein are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness thereof. The Trustee makes no representation as to the validity or sufficiency of this Sixth Supplemental Indenture other than its certificates of authentication.
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In Witness Whereof, the parties hereto have caused this Sixth Supplemental Indenture to be duly executed all as of the day and year first above written.
COREBRIDGE FINANCIAL, INC. | ||
By: | /s/ Elias Habayeb | |
Name: Elias Habayeb | ||
Title: Executive Vice President and Chief Financial Officer | ||
THE BANK OF NEW YORK MELLON, | ||
as Trustee | ||
By: | /s/ Francine Kincaid | |
Name: Francine Kincaid | ||
Title: Vice President |
[Signature Page to Sixth Supplemental Indenture]
ANNEX A
FORM OF THE NOTES
THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS NOTE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A NOTE REGISTERED, AND NO TRANSFER OF THIS NOTE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO THE DEPOSITORY TRUST COMPANY (“DTC”), TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
Temporary Regulation S Legend
[[FOR REGULATION S GLOBAL NOTE ONLY] UNTIL 40 DAYS AFTER THE LATER OF COMMENCEMENT OR COMPLETION OF THE OFFERING, AN OFFER OR SALE OF SECURITIES WITHIN THE UNITED STATES BY A DEALER (AS DEFINED IN THE SECURITIES ACT (AS DEFINED BELOW)) MAY VIOLATE THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IF SUCH OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH RULE 144A THEREUNDER.]
Restricted Legend
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION DATE”) THAT IS IN THE CASE OF RULE 144A NOTES: ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF, THE ORIGINAL ISSUE DATE OF THE ISSUANCE OF ANY ADDITIONAL NOTES AND THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE), IN THE CASE OF REGULATION S NOTES: 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE DATE ON WHICH THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE) WAS FIRST OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN RULE 902 OF REGULATION S) IN RELIANCE ON REGULATION S, ONLY (A) TO THE ISSUER, ANY SUBSIDIARY THEREOF OR AIG, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON IT REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE CERTIFICATION AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS NOTE PURSUANT TO CLAUSE (B) ABOVE OR REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE RESTRICTIONS REFERRED TO IN THIS PARAGRAPH. IN THE CASE OF REGULATION S NOTES: BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.
BY ITS ACQUISITION OF THIS NOTE, THE HOLDER HEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS NOTE CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED (“ERISA”), OF A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) (A “COVERED PLAN”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF AN ENTITY OR ACCOUNT WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION AND HOLDING OF THIS NOTE WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.
BY ITS ACQUISITION OF THIS NOTE, EACH PURCHASER OF THIS NOTE THAT IS USING ASSETS OF ANY COVERED PLAN TO ACQUIRE OR HOLD THIS NOTE PURSUANT TO THE INITIAL OFFERING WILL BE DEEMED TO REPRESENT THAT NONE OF THE ISSUER, THE INITIAL PURCHASERS OR ANY OF THE ISSUER’S OR THEIR RESPECTIVE AFFILIATES HAS ACTED AS THE COVERED PLAN’S FIDUCIARY, OR HAS BEEN RELIED UPON FOR ANY ADVICE, WITH RESPECT TO THE PURCHASER’S DECISION TO ACQUIRE THE NOTES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DTC, A NEW YORK CORPORATION, TO COREBRIDGE FINANCIAL, INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE & CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
COREBRIDGE FINANCIAL, INC.
4.400% SENIOR NOTES DUE 2052
No. [●]
CUSIP No.: [●]
ISIN No.: [●]
COREBRIDGE FINANCIAL, INC., a corporation duly organized and existing under the laws of Delaware (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or its registered assigns, the principal sum of [●] Dollars ($[●]) on [●], and to pay interest thereon from April 5, 2022 or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semiannually in arrears on each April 5 and October 5 (each such date, an “Interest Payment Date”), commencing on October 5, 2022, at the rate of 4.400% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be March 20 or September 20 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a “Special Record Date” for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof which shall be given to Holders of Notes of this series not less than 10 days prior to such “Special Record Date,” all as more fully provided in said Indenture.
Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months.
In the event that an Interest Payment Date is not a Business Day, the Company shall pay interest on the next succeeding Business Day, with the same force and effect as if made on the Interest Payment Date, and without any interest or other payment with respect to the delay. If the Stated Maturity or earlier Redemption Date falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the Stated Maturity or earlier Redemption Date, provided that no interest shall accrue for the period from and after such Stated Maturity or earlier Redemption Date.
Payment of the principal of and premium, if any, and interest on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, which shall initially be the Corporate Trust Office, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.
Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, facsimile or electronic signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.
Dated:
COREBRIDGE FINANCIAL, INC. | ||
By: | ||
Name: | ||
Title: |
This is one of the Notes of the series designated therein referred to in the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK MELLON | ||
As Trustee | ||
By: | ||
Authorized Signatory |
[Reverse of the Notes]
This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), designated as its 4.400% Senior Notes due 2052, issued and to be issued in one or more series under an Indenture, dated as of April 5, 2022 (the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof.
Prior to October 5, 2051 (the “Par Call Date”), the Company may redeem the Notes of this series at its option, in whole or in part, at any time and from time to time, upon not less than 5 Business Days nor more than 60 days’ notice given as provided in the Indenture, at a Redemption Price equal to the greater of:
(a) (i) the sum of the present values of the remaining scheduled payments of principal and interest thereon discounted to the Redemption Date (assuming the Note matures on the Par Call Date) on a semi-annual basis at the Treasury Rate plus 30 basis points (ii) interest accrued to the Redemption Date; and
(b) 100% of the principal amount,
plus, in either case, accrued and unpaid interest thereon to the Redemption Date.
On or after the Par Call Date, the Company may redeem the Notes, in whole or in part, at any time and from time to time, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus accrued and unpaid interest thereon to the Redemption Date.
The definitions of certain terms used in the paragraph above are listed below.
“Treasury Rate” means, with respect to any Redemption Date, the yield determined by the Company in accordance with the following two paragraphs.
The Treasury Rate shall be determined by the Company after 4:15 p.m., New York City time (or after such time as yields on U.S. government securities are posted daily by the Board of Governors of the Federal Reserve System), on the third business day preceding the Redemption Date based upon the yield or yields for the most recent day that appear after such time on such day in the most recent statistical release published by the Board of Governors of the Federal Reserve System designated as “Selected Interest Rates (Daily) - H.15” (or any successor designation or publication) (“H.15”) under the caption “U.S. government securities—Treasury constant maturities—Nominal” (or any successor caption or heading).
In determining the Treasury Rate, the Company shall select, as applicable: (1) the yield for the Treasury constant maturity on H.15 exactly equal to the period from the Redemption Date to the Par Call Date (the “Remaining Life”); or (2) if there is no such Treasury constant maturity on H.15 exactly equal to the Remaining Life, the two yields — one yield corresponding to the Treasury constant maturity on H.15 immediately shorter than and one yield corresponding to the Treasury constant maturity on H.15 immediately longer than the Remaining Life — and shall interpolate to the Par Call Date on a straight-line basis (using the actual number of days) using such yields and rounding the result to three decimal places; or (3) if there is no such Treasury constant maturity on H.15 shorter than or longer than the Remaining Life, the yield for the single Treasury constant maturity on H.15 closest to the Remaining Life. For purposes of this paragraph, the applicable Treasury constant maturity or maturities on H.15 shall be deemed to have a maturity date equal to the relevant number of months or years, as applicable, of such Treasury constant maturity from the Redemption Date.
If on the third business day preceding the Redemption Date H.15 or any successor designation or publication is no longer published, the Company shall calculate the Treasury Rate based on the rate per annum equal to the semi-annual equivalent yield to maturity at 11:00 a.m., New York City time, on the second business day preceding such Redemption Date of the United States Treasury security maturing on, or with a maturity that is closest to, the Par Call Date, as applicable. If there is no U.S. Treasury security maturing on the Par Call Date but there are two or more U.S. Treasury securities with a maturity date equally distant from the Par Call Date, one with a maturity date preceding the Par Call Date and one with a maturity date following the Par Call Date , the Company shall select the U.S. Treasury security with a maturity date preceding the Par Call Date. If there are two or more U.S. Treasury securities maturing on the Par Call Date or two or more U.S. Treasury securities meeting the criteria of the preceding sentence, the Company shall select from among these two or more U.S. Treasury securities the U.S. Treasury security that is trading closest to par based upon the average of the bid and asked prices for such U.S. Treasury securities at 11:00 a.m., New York City time. In determining the Treasury Rate in accordance with the terms of this paragraph, the semi-annual yield to maturity of the applicable U.S. Treasury security shall be based upon the average of the bid and asked prices (expressed as a percentage of principal amount) at 11:00 a.m., New York City time, of such United States Treasury security, and rounded to three decimal places.
The Trustee shall have no responsibility to calculate, or to verify the Company’s calculation of, the redemption price.
In the event of redemption of definitive Notes in part only, a new definitive Note or Notes of this series and of like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof.
The Notes of this series do not have the benefit of any sinking fund obligation and are not subject to repurchase at the option of the Holders.
The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Note or certain restrictive covenants and Events of Default with respect to this Note, in each case upon compliance with certain conditions set forth in the Indenture.
If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Notes of this series, the Holders of not less than 25% in principal amount of the Notes of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory to the Trustee, and the Trustee shall not have received from the Holders of a majority in principal amount of Notes of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of principal hereof or premium, if any, or interest hereon on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, or interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company in any place where the principal of and premium, if any, or interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.
The Notes of this series are issuable only in fully registered form without coupons in denominations of $2,000 and any multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
All terms used in this Note which are defined in the Indenture shall have the meaning assigned to them in the Indenture.
The Indenture and this Note shall be governed by and construed in accordance with the law of the State of New York.
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Print or type assignee’s name, address and zip code)
(Insert assignee’s soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Note on the books of the Issuer. The agent may substitute another to act for him.
Date: | Your Signature: |
Sign exactly as your name appears on the other side of this Note.
Signature Guarantee*:
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustees).
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER RESTRICTED NOTES
This certificate relates to $ principal amount of Notes held in (check applicable space) book-entry or definitive form by the undersigned.
The undersigned (check one box below):
¨ | has requested the Trustee by written order to deliver in exchange for its beneficial interest in a Global Note held by the Depositary a Note or Notes in definitive, registered form of authorized denominations and an aggregate principal amount equal to its beneficial interest in such Global Note (or the portion thereof indicated above) in accordance with the Indenture; or |
¨ | has requested the Trustee by written order to exchange or register the transfer of a Note or Notes. |
In connection with any transfer of any of the Notes evidenced by this certificate, the undersigned confirms that such Notes are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) | ¨ | to the Issuer or subsidiary thereof; or | |
(2) | ¨ | under a registration statement that has been declared effective under the Securities Act of 1933, as amended (the “Securities Act”); or | |
(3) | ¨ | for so long as the Notes are eligible for resale under Rule 144A, to a person seller reasonably believes is a qualified institutional buyer that is purchasing for its own account or the account of another qualified buyer that is purchasing for its own account or for the account of another qualified institutional buyer and to whom notice is given that the transfer is being made in reliance on Rule 144A; or | |
(4) | ¨ | through offers and sales to non-U.S. persons that occur outside the United States within the meaning of Regulation S under the Securities Act; or | |
(5) | ¨ | under any other available exemption from the registration requirements of the Securities Act. |
Unless one of the boxes is checked, the Trustee shall refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof; provided, however, that if box (5) is checked, the Issuer or the Trustee may require, prior to registering any such transfer of the Notes, such legal opinions, certifications and other information as the Issuer or the Trustee has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933.
Your Signature |
Signature of Signature Guarantee
Date: |
Signature of Signature Guarantor |
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company, the Issuer and the Subsidiary Guarantors as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Dated: | |
NOTICE: To be executed by an executive officer | |
Name: | |
Title: | |
Signature Guarantee*: |
* | Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). |
[TO BE ATTACHED TO GLOBAL NOTES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The initial principal amount of this Global Note is $[ ]. The following increases or decreases in this Global Note have been made:
Date of Exchange |
Amount of decrease in Principal Amount of this Global Note |
Amount of increase in Principal Amount of this Global Note |
Principal amount of this Global Note following such decrease or increase |
Signature of authorized signatory of U.S. Trustee or Custodian |
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