Short-Term and Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2023

Details underlying short-term and long-term debt (in millions) were as follows:


	As of December 31,
	2023		2022
Short-Term Debt
Current maturities of long-term debt	$	250	$	500
Total short-term debt	$	250	$	500

Long-Term Debt, Excluding Current Portion
Senior notes:

3.35% notes, due 2025 (1)	$	300	$	300
3.625% notes, due 2026 (1)	400		400
3.80% notes, due 2028 (1)	500		500
3.05% notes, due 2030 (1)	500		500
3.40% notes, due 2031 (1)	500		500
3.40% notes, due 2032 (1)	300		300
6.15% notes, due 2036 (1)	243		243
6.30% notes, due 2037 (1)(2)	375		375
7.00% notes, due 2040 (1)(2)	500		500
4.35% notes, due 2048 (1)	450		450
4.375% notes, due 2050 (1)	300		300
Total senior notes	4,368		4,368
Term loans:
Variable, due 2024 (3)	–		250
Total term loans	–		250
Subordinated notes:
Variable, due 2066 (4) (5)	562		562
Variable, due 2067 (4) (6)	433		433
Total subordinated notes	995		995
Capital securities:
Variable, due 2066 (4) (7)	160		160
Variable, due 2067 (4) (8)	58		58
Total capital securities	218		218
Unamortized premiums (discounts)	(6)		(6)
Unamortized debt issuance costs	(30)		(34)
Unamortized adjustments from discontinued hedges	326		341
Fair value hedge on interest rate swap agreements	(172)		(177)
Total long-term debt	$	5,699	$	5,955

(1) We have the option to repurchase the outstanding notes by paying the greater of 100% of the principal amount of the notes to be redeemed or the make-whole amount (as defined in each note agreement), plus in each case any accrued and unpaid interest as of the date of redemption.

(2) Categorized as operating debt for leverage ratio calculations as the proceeds were primarily used as a long-term structured solution to reduce the strain on increasing statutory reserves associated with secondary guarantee UL and term policies.

(3) Transitioned from London Interbank Offered Rate (“LIBOR”)-based to Secured Overnight Financing Rate (“SOFR”)-based interest rates, plus an applicable transition spread of 10 basis points due to the discontinued publication of LIBOR effective after June 30, 2023. Our applicable credit spread was 112.5 basis points as of December 31, 2023 and 2022, respectively.

(4) To hedge the variability in rates, we purchased interest rate swaps to lock in a fixed rate of approximately 5% over the remaining terms of the subordinated notes and capital securities.

(5) Transitioned from LIBOR-based to 3-Month ISDA SOFR-based interest rates after June 30, 2023, plus a credit spread of 236 basis points.

(6) Transitioned from LIBOR-based to 3-Month ISDA SOFR-based interest rates after June 30, 2023, plus a credit spread of 204 basis points.

(7) Transitioned from LIBOR-based to 3-Month Term SOFR-based interest rates after June 30, 2023, plus a transition spread of 26.161 basis points after June 30, 2023, plus a credit spread of 236 basis points.

(8) Transitioned from LIBOR-based to 3-Month Term SOFR-based interest rates after June 30, 2023, plus a transition spread of 26.161 basis points after June 30, 2023, plus a credit spread of 204 basis points.

Schedule of Extinguishment of Debt

Details underlying the recognition of a gain (loss) on the modification or early extinguishment of debt (in millions) reported within interest expense on the Consolidated Statements of Comprehensive Income (Loss) were as follows:


	For the Years Ended December 31,
	2023		2022		2021
Principal balance outstanding prior to modification
or payoff (1)	$	–	$	–	$	995
Unamortized debt issuance costs and discounts	–		–		–
Amount exchanged or paid to modify or retire debt	–		–		(1,003)
Gain (loss) on modification or early
extinguishment of debt, pre-tax	$	–	$	–	$	(8)

(1) During 2021, we completed the exchange of a portion of our outstanding capital securities for newly issued subordinated notes. In connection with the exchange offer, we solicited and received the requisite number of consents to amend the indentures governing the remaining outstanding capital securities to eliminate various terms and conditions and other provisions, including the covenant that required us to make interest payments in accordance with an alternative coupon satisfaction mechanism upon the occurrence of certain trigger events.

Future Principal Payments

Future principal payments due on long-term debt (in millions) as of December 31, 2023, were as follows:


2024	$	250
2025	300
2026	400
2027	–
2028	500
Thereafter	4,381
Total	$	5,831

Schedule of Line of Credit Facilities

Credit facilities, which allow for borrowing or issuances of letters of credit (“LOCs”), (in millions) were as follows:


		As of December 31, 2023
	Expiration Date	Maximum Available		LOCs Issued
Credit Facilities
Five-year revolving credit facility	December 21, 2028	$	2,000	$	126
LOC facility (1)	August 26, 2031	976		917
LOC facility (1)	October 1, 2031	859		859
Total		$	3,835	$	1,902

(1) Our wholly-owned subsidiaries entered into irrevocable LOC facility agreements with third-party lenders supporting inter-company reinsurance agreements.