Debt



	December 31		December 31
(in millions of U.S. dollars)	2013		2012		Early Redemption Option
Short-term debt
ACE INA $500 million 5.875% senior notes due June 2014	$	500	$	—	Make-whole premium plus 0.20%
Repurchase agreements (weighted average interest rate of 0.3% and 0.4%)	1,401		1,401		None
Total short-term debt	$	1,901	$	1,401
Long-term debt
ACE INA senior notes:
$500 million 5.875% due June 2014	$	—	$	500	Make-whole premium plus 0.20%
$450 million 5.6% due May 2015	449		449		Make-whole premium plus 0.35%
$700 million 2.6% due November 2015	700		699		Make-whole premium plus 0.20%
$500 million 5.7% due February 2017	500		500		Make-whole premium plus 0.20%
$300 million 5.8% due March 2018	300		300		Make-whole premium plus 0.35%
$500 million 5.9% due June 2019	500		500		Make-whole premium plus 0.40%
$475 million 2.7% due March 2023	473		—		Make-whole premium plus 0.10%
$300 million 6.7% due May 2036	299		299		Make-whole premium plus 0.20%
$475 million 4.15% due March 2043	474		—		Make-whole premium plus 0.15%
ACE INA $100 million 8.875% debentures due August 2029	100		100		None
Other long-term debt (2.75% to 7.1% due December 2019 to September 2020)	12		13		None
Total long-term debt	$	3,807	$	3,360
Trust preferred securities
ACE INA capital securities due April 2030	$	309	$	309	Redemption price⁽¹⁾


⁽¹⁾	Redemption price is equal to accrued and unpaid interest to the redemption date plus the greater of (i) 100 percent of the principal amount thereof, or (ii) sum of present value of scheduled payments of principal and interest on the debentures from the redemption date to April 1, 2030.

a) Short-term debt

ACE has executed repurchase agreements with certain counterparties under which ACE agreed to sell securities and repurchase them at a future date for a predetermined price.

b) Long-term debt

In March 2013, ACE INA issued $475 million of 2.7 percent senior notes due March 2023 and $475 million of 4.15 percent senior notes due March 2043.

All of ACE INA’s senior notes are redeemable at any time at ACE INA's option subject to the provisions described above. A “make-whole premium” is the present value of the remaining principal and interest discounted at the applicable U.S. Treasury rate. The senior notes are also redeemable at par plus accrued and unpaid interest in the event of certain changes in tax law. The debentures, subject to certain exceptions, are not redeemable before maturity.

The senior notes and debentures do not have the benefit of any sinking fund. These senior unsecured notes and debentures are guaranteed on a senior basis by ACE Limited and they rank equally with all of ACE's other senior obligations. They also contain customary limitations on lien provisions as well as customary events of default provisions which, if breached, could result in the accelerated maturity of such senior debt.

c) ACE INA capital securities

In March 2000, ACE Capital Trust II, a Delaware statutory business trust, publicly issued $300 million of 9.7 percent Capital Securities (the Capital Securities) due to mature in April 2030. At the same time, ACE INA purchased $9.2 million of common securities of ACE Capital Trust II. The sole assets of ACE Capital Trust II consist of $309 million principal amount of 9.7 percent Junior Subordinated Deferrable Interest Debentures (the Subordinated Debentures) issued by ACE INA due to mature in April 2030.

Distributions on the Capital Securities are payable semi-annually and may be deferred for up to ten consecutive semi-annual periods (but no later than April 1, 2030). Any deferred payments would accrue interest compounded semi-annually if ACE INA defers interest on the Subordinated Debentures. Interest on the Subordinated Debentures is payable semi-annually. ACE INA may defer such interest payments (but no later than April 1, 2030), with such deferred payments accruing interest compounded semi-annually. The Capital Securities and the ACE Capital Trust II Common Securities will be redeemed upon repayment of the Subordinated Debentures.

ACE Limited has guaranteed, on a subordinated basis, ACE INA's obligations under the Subordinated Debentures, and distributions and other payments due on the Capital Securities. These guarantees, when taken together with ACE's obligations under expense agreements entered into with ACE Capital Trust II, provide a full and unconditional guarantee of amounts due on the Capital Securities.