Chubb Ltd

13. Debt

(1)Refer to Note 1 g) to the Consolidated Financial Statements for additional information on the consolidation of VIEs.

(2)Redemption prices are 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 capital securities from the redemption date to April 1, 2030.

a) Repurchase agreements

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

On July 1, 2023, Chubb assumed approximately $1.3 billion of repurchase agreements from Huatai Group upon obtaining a controlling interest and applying consolidation accounting. Certain subsidiaries of Huatai Group are the investment manager of, and maintain investments in, consolidated investment products that are considered VIEs. Under the consolidation of VIEs, the underlying assets and liabilities of these sponsored investment products are recorded at 100 percent within the Consolidated balance sheets, with the relevant amounts attributable to investors other than Chubb reflected as Noncontrolling interests. At December 31, 2024 and December 31, 2023, approximately $815 million and $1.0 billion of repurchase agreements were from VIEs, respectively. Refer to Note 1 g) to the Consolidated Financial Statements for additional information.

b) Short-term debt

Short-term debt comprises the current maturities of our long-term debt instruments described below. These short-term debt instruments were reclassified from long-term debt and are reflected in the table above.

c) Long-term debt

With the exception of the $100 million of 8.875 percent debentures due August 2029, which do not have an early redemption option, the senior notes in the table above are redeemable at any time at Chubb INA's option subject to a “make-whole” premium plus additional basis points as defined 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. These debt securities are also redeemable at par plus accrued and unpaid interest in the event of certain changes in tax law.

The senior notes and debentures do not have the benefit of any sinking fund, are guaranteed on a senior basis by Chubb Limited, and rank equally with all of Chubb'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.

d) Hybrid debt

Trust preferred 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, Chubb 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 Chubb 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 Chubb INA defers interest on the Subordinated Debentures. Interest on the Subordinated Debentures is payable semi-annually. Chubb 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.

Chubb Limited has guaranteed, on a subordinated basis, Chubb INA's obligations under the Subordinated Debentures, and distributions and other payments due on the Capital Securities. These guarantees, when taken together with Chubb'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.

Huatai Life capital supplementary bonds

In November 2024, Huatai Life issued 800 million Chinese yuan renminbi ($111 million based on the foreign exchange rate at the date of issuance) of 2.90 percent capital supplementary bonds (Bonds), due November 2034. The Bonds will be subordinated to Huatai Life’s policy and general liabilities, are redeemable in November 2029, if certain conditions are met, and are guaranteed by Huatai Group. Principal or interest payments on the Bonds may be deferred if such payments would reduce Huatai Life's solvency adequacy ratio below a required minimum.