Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

As previously disclosed, in June 2008, The Prudential Insurance Company of America ("Prudential Insurance"), a wholly owned domestic insurance subsidiary of the registrant, became a member of the Federal Home Loan Bank of New York, or FHLBNY. Membership allows Prudential Insurance to participate in FHLBNY's product line of financial services, including funding agreements, general asset/liability management, and collateralized advances that can be used for liquidity management.

As previously disclosed, under guidance of the New Jersey Department of Banking and Insurance, the fair value of qualifying mortgage-related assets and U.S. Treasury securities that can be pledged as collateral by Prudential Insurance to FHLBNY is limited to 5% of the prior year's admitted assets of Prudential Insurance on a statutory basis, exclusive of separate account assets, which equates to $7.7 billion based on admitted assets as of December 31, 2007. Based on this permitted amount, the qualifying fair value of assets available at Prudential Insurance, and net of the 4.5% activity based stock Prudential Insurance would be obligated to purchase from FHLBNY based on maximum borrowings, the estimated total borrowing capacity with the FHLBNY was $6.3 billion as of December 31, 2008.

Between October 8, 2008 and February 13, 2009, funds advanced by FHLBNY to Prudential Insurance totaled $4.0 billion, with maturities ranging from six months to four years and at fixed interest rates or floating rates based on LIBOR, of which $3.0 billion was outstanding as of December 31, 2008. As of February 13, 2009, of the $4.0 billion total funds advanced, $1.9 billion is invested in cash and short term investments at Prudential Insurance and $2.1 billion was used to support our businesses and for purchases of the requisite FHLB activity based stock.

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