NOTES PAYABLE

A summary of notes payable follows:



(In millions)	June 30, 2012			December 31, 2011
8.50% senior notes due May 2019	$	850		$	850
6.45% senior notes due August 2040	448		⁽¹⁾	448		⁽¹⁾
6.90% senior notes due December 2039	396		⁽²⁾	396		⁽²⁾
3.45% senior notes due August 2015	300			300
2.65% senior notes due February 2017	400			0
4.00% senior notes due February 2022	349		⁽³⁾	0
Yen-denominated Uridashi notes:
2.26% notes due September 2016 (principal amount 8 billion yen)	101			103
Yen-denominated Samurai notes:
1.47% notes due July 2014 (principal amount 28.7 billion yen)	362			369
1.87% notes paid June 2012 (principal amount 26.6 billion yen)	0			342
1.84% notes due July 2016 (principal amount 15.8 billion yen)	199			203
Variable interest rate notes due July 2014 (1.34% in 2012 and 2011, principal amount 5.5 billion yen)	69			71
Yen-denominated loans:
3.60% loan due July 2015 (principal amount 10 billion yen)	126			129
3.00% loan due August 2015 (principal amount 5 billion yen)	63			64
Capitalized lease obligations payable through 2022	9			10
Total notes payable	$	3,672		$	3,285

⁽¹⁾$450 issuance net of a $2 underwriting discount that is being amortized over the life of the notes

⁽²⁾ $400 issuance net of a $4 underwriting discount that is being amortized over the life of the notes

⁽³⁾$350 issuance net of a $1 underwriting discount that is being amortized over the life of the notes

In June 2012, we redeemed 26.6 billion yen (approximately $337 million using the exchange rate on the date of redemption) of our Samurai notes upon their maturity.

In February 2012, the Parent Company issued two series of senior notes totaling $750 million through a U.S. public debt offering. The first series, which totaled $400 million, bears interest at a fixed rate of 2.65% per annum, payable semi-annually, and has a five-year maturity. The second series, which totaled $350 million, bears interest at a fixed rate of 4.00% per annum, payable semi-annually, and has a ten-year maturity. We have entered into cross-currency swaps to reduce interest expense by converting the dollar-denominated principal and interest on the senior notes we issued into yen-denominated obligations. By entering into these cross-currency swaps, we economically converted our $400 million liability into a 30.9 billion yen liability and reduced the interest rate on this debt from 2.65% in dollars to 1.22% in yen. We also economically converted our $350 million liability into a 27.0 billion yen liability and reduced the interest rate on this debt from 4.00% in dollars to 2.07% in yen.

In June 2012, the Parent Company and Aflac entered into a 364-day senior unsecured revolving credit facility agreement in the amount of 50 billion yen with a syndicate of financial institutions. This credit agreement provides for borrowings in Japanese yen or the equivalent of Japanese yen in U.S. dollars on a revolving basis. Borrowings under the credit agreement may be used for general corporate purposes, including a capital contingency plan for our Japanese operations. This credit agreement will expire on the earlier of (a) June 27, 2013, or (b) the date of termination of the commitments upon an event of default as defined in the agreement. The Parent Company and Aflac may request that commitments under the credit agreement be extended for an additional 364-day period from the commitment termination date, subject to terms and conditions which are defined in the agreement. As of June 30, 2012, no borrowings were outstanding under our 50 billion yen revolving credit agreement.

We were in compliance with all of the covenants of our notes payable and line of credit at June 30, 2012. No events of default or defaults occurred during the six-month period ended June 30, 2012.

Subsequent to the end of the second quarter, in July 2012, the Parent Company issued $250 million of senior notes that are an addition to the original series of senior notes issued in February 2012. These notes have a five-year maturity and a fixed rate of 2.65% per annum, payable semi-annually.

For additional information, see Notes 4 and 8 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2011.