JP Morgan Chase 2009 Annual Report Download - page 230

Notes to consolidated financial statements
JPMorgan Chase & Co./2009 Annual Report
228
Note 22 – Long-term debt
JPMorgan Chase issues long-term debt denominated in various currencies, although predominantly U.S. dollars, with both fixed and variable
interest rates. The following table is a summary of long-term debt carrying values (including unamortized original issue discount, valuation
adjustments and fair value adjustments, where applicable) by contractual maturity as of December 31, 2009.
By remaining maturity at 2009
December 31, 2009 Under After 2008
(in millions, except rates) 1 year 1–5 years 5 years Total Total
Parent company
Senior debt:(a) Fixed rate(b) $ 11,645 $ 57,292 $ 24,792 $ 93,729 $ 79,908
Variable rate(c) 16,892 47,308 9,135 73,335 65,234
Interest rates(d) 0.28–6.00% 0.35–7.00% 0.22–7.50% 0.22–7.50% 0.20–7.63%
Subordinated debt: Fixed rate $ 1,713 $ 9,625 $ 13,513 $ 24,851 $ 28,966
Variable rate — 41 1,797 1,838 1,786
Interest rates(d) 7.88–10.00% 1.92–6.75% 1.14–8.53% 1.14–10.00% 1.92–10.00%
Subtotal $ 30,250 $ 114,266 $ 49,237 $ 193,753 $ 175,894
Subsidiaries
Senior debt:(a) Fixed rate $ 96 $ 1,695 $ 1,519 $ 3,310 $ 8,370
Variable rate(e) 6,729 22,759 10,347 39,835 57,980
Interest rates(d) 0.22–0.23% 0.16–2.10% 0.18–14.21% 0.16–14.21% 0.03–14.21%
Subordinated debt: Fixed rate $ — $ — $ 8,655 $ 8,655 $ 8,700
Variable rate — — 1,150 1,150 1,150
Interest rates(d) —% — 0.58–8.25% 0.58–8.25% 2.33–8.25%
Subtotal $ 6,825 $ 24,454 $ 21,671 $ 52,950 $ 76,200
Junior subordinated debt: Fixed rate $ — $ — $ 16,349 $ 16,349 $ 15,180
Variable rate — — 3,266 3,266 3,409
Interest rates(d) — — 0.78–8.75% 0.78–8.75% 2.42–8.75%
Subtotal $ — $ — $ 19,615 $ 19,615 $ 18,589
Total long-term debt(f) $ 37,075 $ 138,720 $ 90,523 $ 266,318(h)(i)(j) $ 270,683(j)
Long-term beneficial interests:
Fixed rate $ 596 $ 373 $ 65 $ 1,034 $ 571
Variable rate 3,361 2,549 3,494 9,404 9,990
Interest rates 0.26–5.20% 0.25–7.13% 0.25–5.50% 0.25–7.13% 0.80–9.16%
Total long-term
beneficial interests(g) $ 3,957 $ 2,922 $ 3,559 $ 10,438 $ 10,561
(a) Included are various equity-linked or other indexed instruments. Embedded derivatives, separated from hybrid securities in accordance with U.S.GAAP, are reported at
fair value and shown net with the host contract on the Consolidated Balance Sheets. Changes in fair value of separated derivatives are recorded in principal transac-
tions revenue. Hybrid securities which the Firm has elected to measure at fair value are classified in the line item of the host contract on the Consolidated Balance
Sheets; changes in fair value are recorded in principal transactions revenue in the Consolidated Statements of Income.
(b) Included $21.6 billion and $14.1 billion as of December 31, 2009 and 2008, respectively, guaranteed by the FDIC under the TLG Program.
(c) Included $19.3 billion and $6.9 billion as of December 31, 2009 and 2008, respectively, guaranteed by the FDIC under the TLG Program.
(d) The interest rates shown are the range of contractual rates in effect at year-end, including non-U.S. dollar fixed- and variable-rate issuances, which excludes the
effects of the associated derivative instruments used in hedge accounting relationships, if applicable. The use of these derivative instruments modifies the Firm’s expo-
sure to the contractual interest rates disclosed in the table above. Including the effects of the hedge accounting derivatives, the range of modified rates in effect at De-
cember 31, 2009, for total long-term debt was (0.17)% to 14.21%, versus the contractual range of 0.16% to 14.21% presented in the table above. The interest rate
ranges shown exclude structured notes accounted for at fair value.
(e) Included $7.8 billion principal amount of U.S. dollar-denominated floating-rate mortgage bonds issued to an unaffiliated statutory trust, which in turn issued €6.0
billion in covered bonds secured by mortgage loans.
(f) Included $49.0 billion and $58.2 billion of outstanding structured notes accounted for at fair value at December 31, 2009 and 2008, respectively.
(g) Included on the Consolidated Balance Sheets in beneficial interests issued by consolidated VIEs. Also included $1.4 billion and $1.7 billion of outstanding structured
notes accounted for at fair value at December 31, 2009 and 2008, respectively. Excluded short-term commercial paper beneficial interests of $4.8 billion at December
31, 2009.
(h) At December 31, 2009, long-term debt aggregating $33.2 billion was redeemable at the option of JPMorgan Chase, in whole or in part, prior to maturity, based on
the terms specified in the respective notes.
(i) The aggregate principal amount of debt that matures in each of the five years subsequent to 2009 is $37.1 billion in 2010, $49.1 billion in 2011, $46.8 billion in
2012, $18.4 billion in 2013 and $24.4 billion in 2014.
(j) Included $3.4 billion and $3.4 billion of outstanding zero-coupon notes at December 31, 2009 and 2008, respectively. The aggregate principal amount of these notes
at their respective maturities was $6.6 billion and $7.1 billion, respectively.