Voya Financial Inc

19. Financing Agreements

Short-term Debt

As of December 31, 2023 and 2022, the Company had$1 and $141, respectively, of short-term borrowings outstanding consisting entirely of the current portion of long-term debt.

Long-term Debt

The following table summarizes the carrying value of the Company’s debt issued or borrowed and outstanding as of December 31, 2023 and 2022:

(1) Guaranteed by ING Group.

(2)Interest is paid semi-annually in arrears.

(3)Guaranteed by Voya Holdings.

(4)See the Junior Subordinated Notes section below.

Unsecured senior debt, which consists of senior fixed rate notes and guarantees of fixed rate notes, ranks highest in priority, followed by subordinated debt, which consists of junior subordinated debt securities.

The aggregate amounts of future principal payments of long-term debt issued by the Company at December 31, 2023 for the next five years and thereafter are$1 in 2024,$401 in 2025, $587 in 2026, $12 in 2027, $0 in 2028 and$1,119 thereafter.

The aggregate amounts of future principal payments of long-term debt issued by Voya Financial, Inc. at December 31, 2023 for the next five years and thereafter are$0 in 2024,$400 in 2025, $447 in 2026, $0 in 2027, $0 in 2028 and$1,040 thereafter.

As of December 31, 2023, the Company was in compliance with its debt covenants.

Loss on Debt Extinguishment

The Company incurred a loss on debt extinguishment of $5, $3 and $31 for the years ended December 31, 2023, 2022 and 2021, respectively, which was recorded in Interest expense in the Consolidated Statements of Operations. See Senior Notesand Junior Subordinated Notes below for additional detail on debt extinguishment.

Senior Notes

During the year ended December 31, 2021, the Company repurchased $23 and $53 par value of its 3.125% Senior Notes, due 2024 (the "2024 Notes") and 3.65% Senior Notes, due 2026, respectively, for $25 and $60, respectively, on the open market.

During the year ended December 31, 2021, the Company completed the redemption of the remaining $377 aggregate principal amount of the 2024 Notes for $401.

Junior Subordinated Notes

Outstanding junior subordinated notes were as follows as of December 31, 2023:

(1) Prior to the scheduled redemption date, interest is paid semi-annually, in arrears.

(2) In the event the securities are not redeemed on or before the scheduled redemption date, interest will accrue after such date at an annual rate of three month LIBOR plus the indicated margin, payable quarterly in arrears. In the event that LIBOR is unavailable, the calculation agent will determine a fallback rate at the time the calculations need to be performed.

(3) The 4.70% Fixed-to-Floating Rate Junior Subordinated Notes due 2048 (the "2048 Notes") are guaranteed on an unsecured, junior subordinated basis by Voya Holdings.

During the year ended December 31, 2023, the Company completed the redemption of all of outstanding principal amount of its 5.65% Fixed-to-Floating Rate Junior Subordinated Note, due 2053 at par.

During the year ended December 31, 2022, the Company repurchased $357 and $10 par value of its 5.65% Fixed-to-Floating Rate Junior Subordinated Note, due 2053 and 4.7% Fixed-to-Floating Rate Junior Subordinated Note, due 2048, respectively, on the open market.

The Company has the right to defer interest payments on the Junior Subordinated Notes for one or more consecutive interest periods for up tofive years, without resulting in a default, during which time interest will be compounded. On or after the optional redemption dates, Voya Financial, Inc. may redeem the Junior Subordinated Notes in whole or in part for the principal amount being redeemed plus accrued and unpaid interest. Prior to the optional redemption dates, the Company may elect to redeem the Junior Subordinated Notes for the principal amount being redeemed upon the occurrence of certain events as defined in the indentures governing the Junior Subordinated Notes, plus accrued and unpaid interest.

At any time following notice of the Company's plan to defer interest and during the period interest is deferred, the Company and its subsidiaries generally, with certain exceptions, may not make payments on or redeem or purchase any shares of the Company's common or preferred stock or any of the debt securities or guarantees that rank in liquidation on a parity with or are junior to the Junior Subordinated Notes.

Aetna Notes

ING Group guarantees various debentures of Voya Holdings that were assumed by Voya Holdings in connection with the Company’s acquisition of Aetna’s life insurance and related businesses in 2000 (the "Aetna Notes"). Concurrent with the completion of the Company’s IPO, the Company entered into a shareholder agreement with ING Group that governs certain aspects of the Company’s continuing relationship. Pursuant to that agreement, the Company was obligated to reduce the aggregate outstanding principal amount of Aetna Notes to no more than zero as of December 31, 2019 or otherwise to make provision for ING Group's guarantee of any outstanding Aetna Notes in excess of such amounts.

The Company's obligation to ING Group with respect to the Aetna Notes can be met, at the Company’s option, through redemptions, repurchases or by posting collateral with a third-party collateral agent, for the benefit of ING Group.

If the Company fails to meet these obligations to ING Group, the Company has agreed to pay a prescribed quarterly fee of 1.25%per quarter to ING Group based on the outstanding principal amount of Aetna Notes for which provision has not been made, in excess of the limits set forth above.

As of December 31, 2023 and 2022, the outstanding principal amount of the Aetna Notes was$218 and $358, respectively. As of December 31, 2023 and 2022, the amount of collateral required to avoid the payment of a fee to ING Group was $218 and $358 respectively. As of December 31, 2023 and 2022, the collateral balance was $227 and $367, respectively.

Put Option Agreement for Senior Debt Issuance

During 2015, the Company entered into an off-balance sheet 10-year put option agreement with a Delaware trust formed by the Company, in connection with the sale by the trust of pre-capitalized trust securities ("P-Caps"), that provides Voya Financial, Inc. the right, at any time over a 10-year period, to issue up to $500 principal amount of its 3.976% Senior Notes due 2025 ("3.976% Senior Notes") to the trust and receive in exchange a corresponding principal amount of U.S. Treasury securities that are held by the trust. The 3.976% Senior Notes will not be issued unless and until the put option is exercised. In return, the Company pays a semi-annual put premium to the trust at a rate of 1.875% per annum applied to the unexercised portion of the put option, and reimburses the trust for its expenses. The put premium and expense reimbursements are recorded in Operating expenses in the Consolidated Statements of Operations. If and when issued, the 3.976% Senior Notes will be guaranteed by Voya Holdings.

Upon an event of default, the put option will be exercised automatically in full. The Company has a one-time right to unwind a prior voluntary exercise of the put option by repurchasing all of the 3.976% Senior Notes then held by the trust for U.S. Treasury securities. If the put option has been fully exercised, the 3.976% Senior Notes issued may be redeemed by the Company prior to their maturity at par or, if greater, at a make-whole redemption price, in each case plus accrued and unpaid interest to the date of redemption. The P-Caps are to be redeemed by the trust on February 15, 2025 or upon any early redemption of the 3.976% Senior Notes.

On May 1, 2023, pursuant to the put option agreement, the Company exercised the put option to require the trust to purchase $400 aggregate principal amount of 3.976% Senior Notes in exchange for a corresponding amount of U.S. Treasury securities held by the trust. On May 3, 2023, the Company issued $400 aggregate principal amount of 3.976% Senior Notes to the trust and the Company received approximately $400 of U.S. Treasury securities. The proceeds from the sale of the U.S. Treasury securities were used to redeem the 5.650% Fixed-to-Floating Rate Junior Subordinated Notes due 2053 on May 15, 2023 (the "2053 Notes"). See Junior Subordinated Notes above.

The Company uses credit facilities as part of its capital management practices. Total fees associated with credit facilities for the years ended 2023, 2022 and 2021 were $1, $2 and $2, respectively.

The following table outlines the Company's credit facilities as of December 31, 2023:

Senior Unsecured Credit Facility

As of December 31, 2023, the Company had a$500 senior unsecured credit facility with a syndicate of banks which expires May 1, 2028. The facility provides $500 of committed capacity for revolving loan borrowings and letters of credit issuances, including a sublimit for swingline (short-term) loans in an aggregate amount of up to$25. As of December 31, 2023, there wereno amounts outstanding as revolving credit borrowings, no amounts of LOCs outstanding, andno amounts of swingline loans outstanding under the senior unsecured credit facility. Under the terms of the facility, the Company is required to maintain a minimum net worth of$4.998 billion, which may increase upon any future equity issuances by the Company.