Debt

In connection with the Chubb Corp acquisition, Chubb INA Holdings Inc. (formerly ACE INA Holdings Inc.) assumed $3.3 billion par value outstanding debt of Chubb Corp, fair valued at $3.8 billion at the acquisition date. Chubb INA Holdings Inc. (Chubb INA) assumed Chubb Corp's rights, duties and obligations and Chubb Limited fully and unconditionally guarantees Chubb INA's payment obligations under these debts. Additionally, during the first quarter of 2016 we adopted new guidance that required debt issuance costs be recorded as a reduction of the carrying amount of the related debt liability (these costs were previously included in Other assets on the Consolidated balance sheets). The debt balances at December 31, 2015 have been updated to reflect the adoption of this guidance.



	June 30		December 31
(in millions of U.S. dollars)	2016		2015		Early Redemption Option
Repurchase agreements (weighted average interest rate of 0.8% in 2016 and 0.6% in 2015)	$	1,405	$	1,404	None
Short-term debt
Chubb INA senior notes:
$500 million 5.7% due February 2017	$	500	$	—	Make-whole premium plus 0.20%
Total short-term debt	$	500	$	—
Long-term debt
Chubb INA senior notes:
$500 million 5.7% due February 2017	$	—	$	500	Make-whole premium plus 0.20%
$300 million 5.8% due March 2018	300		299		Make-whole premium plus 0.35%
$600 million 5.75% due May 2018	648		—		Make-whole premium plus 0.30%
$100 million 6.6% due August 2018	109		—		None
$500 million 5.9% due June 2019	497		497		Make-whole premium plus 0.40%
$1,300 million 2.3% due November 2020	1,294		1,294		Make-whole premium plus 0.15%
$1,000 million 2.875% due November 2022	994		994		Make-whole premium plus 0.20%
$475 million 2.7% due March 2023	471		471		Make-whole premium plus 0.10%
$700 million 3.35% due May 2024	694		694		Make-whole premium plus 0.15%
$800 million 3.15% due March 2025	794		794		Make-whole premium plus 0.15%
$1,500 million 3.35% due May 2026	1,487		1,487		Make-whole premium plus 0.20%
$100 million 8.875% due August 2029	100		100		None
$200 million 6.8% due November 2031	259		—		Make-whole premium plus 0.25%
$300 million 6.7% due May 2036	297		297		Make-whole premium plus 0.20%
$800 million 6.0% due May 2037	984		—		Make-whole premium plus 0.20%
$600 million 6.5% due May 2038	780		—		Make-whole premium plus 0.30%
$475 million 4.15% due March 2043	469		469		Make-whole premium plus 0.15%
$1,500 million 4.35% due November 2045	1,482		1,482		Make-whole premium plus 0.25%
Chubb INA $1,000 million 6.375% capital securities due March 2067⁽¹⁾	961		—		Make-whole premium plus 0.25%-0.50%
Other long-term debt (2.75% to 7.1% due December 2019 to September 2020)	11		11		None
Total long-term debt	$	12,631	$	9,389
Trust preferred securities
Chubb INA capital securities due April 2030	$	308	$	307	Redemption prices⁽²⁾


⁽¹⁾	6.375% interest rate through April 14, 2017; interest rate equal to three month LIBOR rate plus 2.25% thereafter.


⁽²⁾	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.

Certain of Chubb INA's senior notes and capital securities are redeemable at any time at Chubb INA's option subject to the provisions described in the table 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 and capital securities are also redeemable at par plus accrued and unpaid interest in the event of certain changes in tax law.

We have outstanding $1.0 billion of unsecured junior subordinated capital securities at June 30, 2016, which were assumed by Chubb INA in connection with the Chubb Corp acquisition. The capital securities will become due on April 15, 2037, the scheduled maturity date, but only to the extent that we have received sufficient net proceeds from the sale of certain qualifying capital securities. We must use commercially reasonable efforts, subject to certain market disruption events, to sell enough qualifying capital securities to permit repayment of the capital securities on the scheduled maturity date or as soon thereafter as possible. Any remaining outstanding principal amount will be due on March 29, 2067, the final maturity date. The capital securities bear interest at a rate of 6.375 percent through April 14, 2017. Thereafter, the capital securities will bear interest at a rate equal to the three-month LIBOR rate plus 2.25 percent. Subject to certain conditions, we have the right to defer the payment of interest on the capital securities for a period not exceeding ten consecutive years. During any such period, interest will continue to accrue and we generally may not declare or pay any dividends on or purchase any shares of our capital stock.

In connection with the issuance of capital securities, a replacement capital covenant was entered into in which we agreed that we will not repay, redeem, or purchase capital securities before March 29, 2047, unless, subject to certain limitations, we have received proceeds from the sale of specified replacement capital securities. The replacement capital covenant is not intended for the benefit of holders of the capital securities and may not be enforced by them. The replacement capital covenant is for the benefit of holders of one or more designated series of Chubb's indebtedness, which initially was and continues to be its 6.8 percent debentures due November 2031.

Subject to the replacement capital covenant, the $1.0 billion capital securities may be redeemed, in whole or in part, at any time (i) on or after April 15, 2017 at a redemption price equal to the principal amount plus any accrued interest or (ii) prior to April 15, 2017 at a redemption price equal to the greater of (1) the principal amount or (2) a make-whole premium, in each case plus any accrued interest.