Debt

9 Months Ended

Sep. 30, 2020

We generally issue senior unsecured notes for long-term borrowing purposes. At September 30, 2020 and December 31, 2019, we had $20,549 and $18,815, respectively, outstanding under these notes.

We have an unsecured surplus note with an outstanding principal balance of $25 at both September 30, 2020 and December 31, 2019.

On August 17, 2020, we repaid, at maturity, the $700 outstanding balance of our 4.350% senior unsecured notes.

Additionally, during the three and nine months ended September 30, 2020, we repurchased $79 of outstanding principal amount of certain other senior unsecured notes, plus applicable premium for early redemption plus accrued and unpaid interest, for cash totaling $109. We recognized a loss on extinguishment of debt of $30 for the three and nine months ended September 30, 2020 for the repurchase of these notes.

On May 5, 2020, we issued $400 aggregate principal amount of additional senior notes pursuant to a reopening of our existing 2.375% Notes due 2025, or the 2025 Notes, $1,100 aggregate principal amount of 2.250% Notes due 2030, or the 2030 Notes, and $1,000 aggregate principal amount of 3.125% Notes due 2050, or the 2050 Notes, under our shelf registration statement. The 2025 Notes constitute an additional issuance of our 2.375% notes due 2025, of which $850 aggregate principal amount was issued on September 9, 2019. Interest on the 2025 Notes is deemed to have accrued from January 15, 2020 and is payable semi-annually in arrears on January 15 and July 15 of each year, commencing July 15, 2020. Interest on the 2030 Notes and 2050 Notes is payable semi-annually in arrears on May 15 and November 15 of each year, commencing November 15, 2020. The proceeds were used for working capital and general corporate purposes, including, but not limited to, repayment of short-term and long-term debt, repurchase of our common stock pursuant to our share repurchase program and to fund acquisitions.

We have a senior revolving credit facility, or the 5-Year Facility, with a group of lenders for general corporate purposes. The 5-Year Facility provides credit up to $2,500 and matures in June 2024. We also have a 364-day senior revolving credit facility, or 364-Day Facility, with a group of lenders for general corporate purposes, which provides for credit in the amount of $1,000. In May 2020, we amended and extended the 364-Day Facility, which now matures in June 2021. Our ability to borrow under these credit facilities is subject to compliance with certain covenants, including covenants requiring us to maintain a defined debt-to-capital ratio of not more than 60%, subject to increase in certain circumstances set forth in the applicable credit agreement. As of September 30, 2020, our debt-to-capital ratio, as defined and calculated under the credit facilities, was 38.1%. We do not believe the restrictions contained in any of our credit facility covenants materially affect our financial or operating flexibility. As of September 30, 2020, we were in compliance with all of the debt covenants under these credit facilities. There were no amounts outstanding under the 364-Day Facility at any time during the nine months ended September 30, 2020 or the year ended December 31, 2019. At September 30, 2020 and December 31, 2019, there were no amounts outstanding under our 5-Year Facility.

Through certain subsidiaries, we have entered into multiple 364-day lines of credit, or the Subsidiary Credit Facilities, with separate lenders for general corporate purposes. The Subsidiary Credit Facilities provide combined credit of up to $400. At September 30, 2020 and December 31, 2019, $0 and $50, respectively, were outstanding under our Subsidiary Credit Facilities.

We have an authorized commercial paper program of up to $3,500, the proceeds of which may be used for general corporate purposes. At September 30, 2020 and December 31, 2019, we had $0 and $400, respectively, outstanding under this program.

We have outstanding senior unsecured convertible debentures due 2042, or the Debentures, which are governed by an indenture between us and The Bank of New York Mellon Trust Company, N.A., as trustee, or the indenture. We have accounted for the Debentures in accordance with the FASB cash conversion guidance for debt with conversion and other options. As a result, the value of the embedded conversion option (net of deferred taxes and equity issuance costs) has been bifurcated from its debt host and recorded as a component of additional paid-in capital in our consolidated balance sheets. During the three and nine months ended September 30, 2020, $0 and $40, respectively, of aggregate principal amount of the Debentures were surrendered for conversion by certain holders in accordance with the terms and provisions of the indenture. We elected to settle the excess of the principal amount of the conversions with cash for total payments during the three and nine months ended September 30, 2020 of $0 and $155, respectively. We recognized a loss on the extinguishment of debt related to the Debentures of $0 and $4, respectively, for the three and nine months ended September 30, 2020, based on the fair values of the debt on the conversion settlement dates.

The following table summarizes at September 30, 2020 the related balances, conversion rate and conversion price of the Debentures:


Outstanding principal amount	$	175
Unamortized debt discount	$	54
Net debt carrying amount	$	119
Equity component carrying amount	$	63
Conversion rate (shares of common stock per $1,000 of principal amount)	14.0519
Effective conversion price (per $1,000 of principal amount)	$	71.1648

We are a member, through certain subsidiaries, of the Federal Home Loan Bank of Indianapolis, the Federal Home Loan Bank of Cincinnati, the Federal Home Loan Bank of Atlanta and the Federal Home Loan Bank of New York, or collectively, the FHLBs. As a member, we have the ability to obtain short-term cash advances, subject to certain minimum collateral requirements. We had $150 and $650 in outstanding short-term borrowings from the FHLBs at September 30, 2020 and December 31, 2019, with fixed interest rates of 0.200% and 1.664%, respectively.

All debt is a direct obligation of Anthem, Inc., except for the surplus note, the FHLB borrowings, and the Subsidiary Credit Facilities.