Capital One 2013 Annual Report Download - page 221

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Other Debt
We filed a shelf registration statement with the U.S. Securities & Exchange Commission 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.
Senior and Subordinated Notes
As of December 31, 2013, we had $13.1 billion of senior and subordinated notes outstanding, net of fair value
hedging losses of $8 million. As of December 31, 2012, we had $12.7 billion of senior and subordinated notes
outstanding, net of fair value hedging losses of $857 million. In 2013, we issued $2.0 billion of long-term senior
unsecured debt. The offering of senior notes included $380 million of floating-rate and $400 million of fixed-rate
debt due 2016 and $1.2 billion of fixed-rate debt due 2018. See “Note 10—Derivative Instruments and Hedging
Activities” for information about our fair value hedging activities.
In the first quarter of 2013, we exchanged $1.2 billion of outstanding 8.80% subordinated notes due 2019. The
transaction involved offering current holders market value plus an exchange premium for these outstanding
notes. The consideration was paid through a combination of $1.4 billion of new 3.375% subordinated notes due
2023 and cash of $209 million. In the second quarter of 2013, we exchanged $763 million of outstanding 6.75%
senior notes due 2017. The transaction involved offering current holders market value plus an exchange premium
for these outstanding notes. The consideration was paid through a combination of $839 million of new 3.5%
senior notes due 2023 and cash of $88 million. Both exchanges were accounted for as a modification of debt.
Junior Subordinated Debentures
In the first quarter of 2013 in connection with our redemption of our trust preferred securities, we redeemed our
junior subordinated debt with an aggregate carrying value of $3.65 billion, resulting in a $65 million loss on
extinguishment of debt.
FHLB Advances and Other Short-term Borrowings
In addition to issuance capacity under the shelf registration statement, we have access to other borrowing
programs, including advances from the FHLB. Our FHLB membership is secured by our investment in FHLB
stock which totaled $774 million and $1.3 billion as of December 31, 2013 and 2012, respectively, and is
included in other assets on our consolidated balance sheets.
We had outstanding FHLB advances, which were secured by our investment securities, residential home loans,
multifamily loans, commercial real-estate loans and home equity lines of credit, totaling $16.3 billion and
$20.9 billion as of December 31, 2013 and 2012, respectively.
We have access to short term borrowings through the Federal Reserve. Our membership with the Federal Reserve
is secured by our investment in Federal Reserve stock, totaling $1.2 billion, as of both December 31, 2013 and
2012. This investment is included in other assets on our consolidated balance sheets.
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