Capital One 2012 Annual Report Download - page 135

Borrowing Capacity
We filed a new effective shelf registration statement with the SEC on April 30, 2012, which will expire three
years from the filing date, under which, from time to time, we may offer and sell an indeterminate aggregate
amount of senior or subordinated debt securities, preferred stock, depository shares, common stock, purchase
contracts, warrants and units. There is no limit under this shelf registration statement to the amount or number of
such securities that we may offer and sell, subject to market conditions.
In addition to issuance capacity under the shelf registration statement, we also have access to FHLB Advances
and Letters of Credit with a maximum borrowing capacity of $ 38.2 billion as of December 31, 2012. This
borrowing capacity was secured by posting $32.6 billion of loans and $5.6 billion of securities as collateral. We
had $21.2 billion outstanding as of December 31, 2012, and $17.0 billion still available to us to borrow against
under this program. This funding source is non-revolving and funding availability is subject to market conditions.
The ability to draw down funding is based on membership status and the amount is dependent upon the Banks’
ability to post collateral. Our FHLB membership and borrowings are secured by our investment in FHLB stock,
which totaled $1.3 billion and $362 as of December 31, 2012 and 2011, respectively.
Covenants
The terms of certain lease and credit facility agreements related to other borrowings and operating leases include
several financial covenants that require performance measures and equity ratios to be met. If these covenants are
not met, there may be an acceleration of the payment due dates noted in Table 29. As of December 31, 2012, we
were not in default of any such covenants.
Credit Ratings
Our credit ratings have a significant impact on our ability to access capital markets and our borrowing costs.
Rating agencies base their ratings on numerous factors, including liquidity, capital adequacy, asset quality,
quality of earnings and the probability of systemic support. Significant changes in these factors could result in
different ratings. Such ratings help to support our cost effective unsecured funding as part of our overall
financing programs. Table 30 provides a summary of the credit ratings for the senior unsecured debt of Capital
One Financial Corporation, COBNA and CONA as of December 31, 2012 and 2011.
Table 30: Senior Unsecured Debt Credit Ratings
2012 2011
Capital One
Financial
Corporation
Capital One
Bank (USA),
N.A.
Capital One,
N.A.
Capital One
Financial
Corporation
Capital One
Bank (USA),
N.A.
Capital One,
N.A.
Moody’s .................. Baa1 A3 A3 Baa1 A3 A3
S&P ..................... BBB BBB+ BBB+ BBB BBB+ BBB+
Fitch ..................... A- A- A- A- A- A-
* low
** high
As of February 25, 2013, Moody’s and Fitch have categorized us as a stable outlook, while S&P categorized us
as negative outlook.
Contractual Obligations
In the normal course of business, we enter into various contractual obligations that may require future cash
payments that affect our short- and long-term liquidity and capital resource needs. Our future cash outflows
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