NOTES PAYABLE

A summary of notes payable follows:



(In millions)	September 30, 2013				December 31, 2012
3.45% senior notes due August 2015		$	300			$	300
2.65% senior notes due February 2017		656		⁽¹⁾		657		⁽¹⁾
8.50% senior notes due May 2019		850				850
4.00% senior notes due February 2022		349		⁽²⁾		349		⁽²⁾
3.625% senior notes due June 2023		700				0
6.90% senior notes due December 2039		396		⁽²⁾		396		⁽²⁾
6.45% senior notes due August 2040		448		⁽²⁾		448		⁽²⁾
5.50% subordinated debentures due September 2052		500				500
Yen-denominated Uridashi notes:
2.26% notes due September 2016 (principal amount 8 billion yen)		82				92
Yen-denominated Samurai notes:
1.47% notes due July 2014 (principal amount 28.7 billion yen)		294				331
1.84% notes due July 2016 (principal amount 15.8 billion yen)		162				182
Variable interest rate notes due July 2014 (1.31% in 2013 and 1.34% in 2012, principal amount 5.5 billion yen)		56				64
Yen-denominated loans:
3.60% loan due July 2015 (principal amount 10 billion yen)		102				116
3.00% loan due August 2015 (principal amount 5 billion yen)		51				58
Capitalized lease obligations payable through 2022		7				9
Total notes payable		$	4,953			$	4,352

⁽¹⁾Principal amount plus an issuance premium that is being amortized over the life of the notes

⁽²⁾Principal amount net of an issuance discount that is being amortized over the life of the notes

In June 2013, the Parent Company issued $700 million of senior notes through a U.S. public debt offering. The notes bear interest at a fixed rate of 3.625% per annum, payable semi-annually, and have a ten-year maturity. These notes are redeemable at our option in whole at any time or in part from time to time at a redemption price equal to the greater of: (i) the aggregate principal amount of the notes to be redeemed or (ii) the amount equal to the sum of the present values of the remaining scheduled payments for principal of and interest on the notes to be redeemed, not including any portion of the payments of interest accrued as of such redemption date, discounted to such redemption date on a semi-annual basis at the treasury rate plus 20 basis points, plus in each case, accrued and unpaid interest on the principal amount of the notes to be redeemed to, but excluding, such redemption date. We entered into cross-currency interest rate 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 swaps, we economically converted our $700 million liability into a 69.8 billion yen liability and reduced the interest rate on this debt from 3.625% in dollars to 1.50% in yen.

In March 2013, we terminated our senior unsecured revolving credit facility that was due to expire in June 2013, and the Parent Company and Aflac entered into a 5-year senior unsecured revolving credit facility agreement with a syndicate of financial institutions that provides for borrowings in the amount of 50 billion yen. This credit agreement provides for borrowings in Japanese yen or the equivalent of Japanese yen in U.S. dollars on a revolving basis. Borrowings will bear interest at LIBOR plus the applicable margin of 1.125%. In addition, the Parent Company and Aflac are required to pay a facility fee of .125% on the commitments. As of September 30, 2013, we did not have any borrowings outstanding under our 50 billion yen revolving credit agreement. Borrowings under the credit agreement may be used for general corporate purposes, including a capital contingency plan for our Japanese operations. Borrowings under the financing agreement mature at the termination date of the credit agreement. The agreement requires compliance with certain financial covenants on a quarterly basis. This credit agreement will expire on the earlier of (a) March 29, 2018, or (b) the date of termination of the commitments upon an event of default as defined in the agreement.

We were in compliance with all of the covenants of our notes payable and line of credit at September 30, 2013. No events of default or defaults occurred during the nine-month period ended September 30, 2013.

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, 2012.