Short-Term and Long-Term Debt

3 Months Ended

Mar. 31, 2020

SHORT-TERM AND LONG-TERM DEBT

Short-term Debt

The table below presents the Company’s short-term debt as of the dates indicated:



	March 31, 2020			December 31, 2019
	($ in millions)
Commercial paper:
Prudential Financial	$	453		$	25
Prudential Funding, LLC	700			524
Subtotal commercial paper	1,153			549
Current portion of long-term debt:
Senior Notes	1,179			1,179
Mortgage Debt	191			192
Subtotal current portion of long-term debt	1,370			1,371
Other(1)	16			13
Total short-term debt(2)	$	2,539		$	1,933
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	576		$	224
Daily average commercial paper outstanding for the quarter ended	$	1,495		$	1,702
Weighted average maturity of outstanding commercial paper, in days	9			6
Weighted average interest rate on outstanding commercial paper	0.79		%	1.61		%

_________

(1) Includes $16 million drawn on a revolving line of credit held by a subsidiary at March 31, 2020.

(2) Includes Prudential Financial debt of $1,632 million and $1,204 million at March 31, 2020 and December 31, 2019, respectively.

Prudential Financial and certain subsidiaries have access to external sources of liquidity, including membership in the Federal Home Loan Banks, commercial paper programs and a contingent financing facility in the form of a put option agreement. The Company also maintains syndicated, unsecured committed credit facilities as an alternative source of liquidity. At March 31, 2020, no amounts were drawn on these credit facilities. For additional information on these sources of liquidity, see Note 17 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Federal Home Loan Bank of New York (“FHLBNY”)

During the first quarter of 2020, PICA issued $3.6 billion in funding agreements under the FHLBNY facility with maturities ranging from one month to seven years and rates from 0.560% to 1.925%. These funding agreements are reflected as “Policyholders’ account balances” on the Consolidated Statements of Financial Position and as such are not included in the foregoing table. For additional information on this facility, see Note 17 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Long-term Debt

The table below presents the Company’s long-term debt as of the dates indicated:



	March 31, 2020		December 31, 2019
	(in millions)
Fixed-rate obligations:
Surplus notes	$	342	$	342
Surplus notes subject to set-off arrangements(1)	8,284		7,484
Senior notes	11,573		10,084
Mortgage debt(2)	103		104
Floating-rate obligations:
Line of credit	300		300
Surplus notes subject to set-off arrangements(1)	2,330		2,265
Mortgage debt(3)	253		241
Junior subordinated notes(4)	7,578		7,575
Subtotal	30,763		28,395
Less: assets under set-off arrangements(1)	10,614		9,749
Total long-term debt(5)	$	20,149	$	18,646

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(1)	The surplus notes have corresponding assets where rights to set-off exist, thereby reducing the amount of surplus notes included in long-term debt.


(2)	Includes $43 million of debt denominated in foreign currency at both March 31, 2020 and December 31, 2019.


(3)	Includes $52 million and $53 million of debt denominated in foreign currency at March 31, 2020 and December 31, 2019, respectively.


(4)	Includes Prudential Financial debt of $7,520 million and $7,518 million at March 31, 2020 and December 31, 2019, respectively. Also includes subsidiary debt of $58 million and $57 million denominated in foreign currency at March 31, 2020 and December 31, 2019, respectively.


(5)	Includes Prudential Financial debt of $18,920 million and $17,430 million at March 31, 2020 and December 31, 2019, respectively.

At March 31, 2020 and December 31, 2019, the Company was in compliance with all debt covenants related to the borrowings in the table above.

Surplus Notes. In March 2020, Prudential Legacy Insurance Company of New Jersey issued $800 million of surplus notes under its $4 billion reserve financing facility. As of March 31, 2020, an aggregate of $900 million of surplus notes were outstanding under the facility and no credit-linked note payments have been required. For additional information on this facility, see Note 17 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

Senior Notes. In March 2020, the Company issued $1.5 billion of medium-term notes: $500 million with an interest rate of 1.5% maturing in March 2026, $500 million with an interest rate of 2.1% maturing in March 2030, and $500 million with an interest rate of 3.0% maturing in March 2040. As of March 31, 2020, the outstanding balance of the Company’s senior notes was $12.75 billion, an increase of $1.5 billion from December 31, 2019.