Discover 2011 Annual Report Download - page 134

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122
11. Borrowings
Long-term borrowings consist of borrowings and capital leases having original maturities of one year or more. The
following table provides a summary of the Company’s long-term borrowings and weighted average interest rates on balances
outstanding at period end (dollars in thousands):
Securitized Debt
Fixed rate asset-backed securities
(including discount of $1,258)
Floating rate asset-backed securities
Floating rate asset-backed securities
Floating rate asset-backed securities
and other borrowings
Total Discover Card Master Trust I and
Discover Card Execution Note Trust
Floating rate asset-backed securities
(including discount of $225,997)
Floating rate asset-backed securities
(including discount of $3,562)
Floating rate asset-backed securities
(including premium of $2,663)
Floating rate asset-backed securities
(including premium of $6,341)
Total SLC Private Student Loan Trusts
Total Long-Term Borrowings—owed to
securitization investors
Discover Financial Services (Parent
Company)
Fixed rate senior notes due 2017
Principal value (including
discount of $451)
Fair value adjustment(3)
Book value
Fixed rate senior notes due 2019
Discover Bank
Subordinated bank notes due 2019
(including discount of $1,437)
Subordinated bank notes due 2020
(including discount of $2,901)
Floating rate secured borrowings
Floating rate secured borrowings
Floating rate secured borrowings(4)
Capital lease obligations
Total long-term
borrowings
November 30, 2011
Outstanding
$ 1,748,742
10,044,739
1,250,000
250,000
13,293,481
1,390,066
627,072
157,338
374,555
2,549,031
15,842,512
399,549
9,855
409,404
400,000
698,563
497,099
—
—
437,613
1,987
$ 18,287,178
Interest
Rate
5.65%
0.81%
0.69%
0.91%
0.60%
4.25%
4.00%
3.75%
6.45%
10.25%
8.70%
7.00%
—%
—%
0.70%
4.51%
November 30, 2010
Outstanding
$ 2,598,343
10,621,057
1,250,000
450,000
14,919,400
—
—
—
—
—
14,919,400
399,467
(7,888)
391,579
400,000
698,382
496,753
93,980
212,336
492,910
388
$ 17,705,728
Interest
Rate
5.47%
0.75%
0.63%
0.98%
6.45%
10.25%
8.70%
7.00%
0.79%
0.70%
0.66%
6.26%
Interest Rate Terms
Fixed
1-month LIBOR(1) +
5 to 130 basis points
3-month LIBOR(1) +
34 basis points
Commercial Paper
rate + 70 basis points
3-month LIBOR(1) +
7 to 45 basis points
Prime rate +100 basis
points
Prime rate +
75 basis points
1-month LIBOR(1) +
350 basis points
Fixed
Fixed
Fixed
Fixed
Commercial Paper
rate + 50 basis points
Fixed
Maturity
Various June 2013—
September 2017
Various April 2012—
November 2016
December 2012
April 2013
Various April 2018—
July 2036(2)
June 2031(2)
July 2042(2)
July 2042(2)
June 2017
July 2019
November 2019
April 2020
August 2013(4)
Various August 2015—
April 2016
(1) London Interbank Offered Rate (“LIBOR”).
(2) Repayment of this debt is dependent upon the timing of principal and interest payments on the underlying student loans. The dates shown represent final
maturity dates.
(3) The Company uses interest rate swaps to hedge this long-term borrowing against changes in fair value attributable to changes in LIBOR. See Note 23:
Derivatives and Hedging Activities.
(4) Under a program established by the U.S. Department of Education, this loan facility was entered into to fund certain federal student loans, which were
held for sale at November 30, 2011 and November 30, 2010. Principal and interest payments on the underlying student loans will reduce the balance of
the secured borrowing over time, with final maturity in August 2013. However, upon sale of the loans, this loan facility will be repaid or assumed by a
buyer.
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