JP Morgan Chase 2010 Annual Report Download - page 266

Notes to consolidated financial statements
JPMorgan Chase & Co./2010 Annual Report
266
The Firm participated in the TLG Program commencing in December
2008. The TLG Program was available to, among others, all U.S.
depository institutions insured by the FDIC and all U.S. bank holding
companies, unless they opted out or the FDIC terminated their
participation. Under the TLG Program, the FDIC guaranteed through
the earlier of maturity or June 30, 2012, certain senior unsecured
debt issued though October 31, 2009, in return for a fee to be paid
based on the amount and maturity of the debt. Under the TLG
Program, the FDIC would pay the unpaid principal and interest on an
FDIC-guaranteed debt instrument upon the failure of the
participating entity to make a timely payment of principal or interest
in accordance with the terms of the instrument.
JPMorgan Chase & Co. (Parent Company) has guaranteed certain
debt of its subsidiaries, including both long-term debt and structured
notes sold as part of the Firm’s market-making activities. These
guarantees rank on parity with all of the Firm’s other unsecured and
unsubordinated indebtedness. Guaranteed liabilities totaled $3.7
billion and $4.5 billion at December 31, 2010 and 2009, respec-
tively. For additional information, see Note 2 on pages 166–170 of
this Annual Report.
The Firm’s unsecured debt does not contain requirements that
would call for an acceleration of payments, maturities or changes
in the structure of the existing debt, provide any limitations on
future borrowings or require additional collateral, based on unfa-
vorable changes in the Firm’s credit ratings, financial ratios, earn-
ings or stock price.
Junior subordinated deferrable interest debentures held by
trusts that issued guaranteed capital debt securities
At December 31, 2010, the Firm had established 26 wholly-owned
Delaware statutory business trusts (“issuer trusts”) that had issued
guaranteed capital debt securities.
The junior subordinated deferrable interest debentures issued by the
Firm to the issuer trusts, totaling $20.3 billion and $19.6 billion at
December 31, 2010 and 2009, respectively, were reflected in the
Firm’s Consolidated Balance Sheets in long-term debt, and in the
table on the preceding page under the caption “Junior subordinated
debt” (i.e., trust preferred capital debt securities). The Firm also
records the common capital securities issued by the issuer trusts in
other assets in its Consolidated Balance Sheets at December 31,
2010 and 2009. The debentures issued to the issuer trusts by the
Firm, less the common capital securities of the issuer trusts, quali-
fied as Tier 1 capital as of December 31, 2010.
The following is a summary of the outstanding trust preferred capital debt securities, including unamortized original issue discount, issued by
each trust, and the junior subordinated deferrable interest debenture issued to each trust, as of December 31, 2010.
December 31, 2010 (in millions)
Amount
of trust preferred
capital debt
securities issued
by trust (a)
Principal amount
of debenture
issued to trust (b)
Issue date
Stated maturity
of trust preferred
capital securities
and debentures
Earliest
redemption
date
Interest rate of
trust preferred
capital securities
and debentures
Interest payment/
distribution dates
Bank One Capital III
$
474
$
674
2000
2030
Any time
8.75%
Semia
nnually
Bank One Capital VI
525
55
3
2001
2031
Any time
7.20%
Quarterly
Chase Capital II
482
497
1997
2027
Any time
LIBOR + 0.50%
Quarterly
Chase Capital III
295
305
1997
2027
Any time
L
I
BOR + 0.55%
Quarterly
Chase Capital VI
241
2
49
1998
2028
Any time
LIBOR + 0.625%
Quarterly
First Chicago NBD Capital I
249
256
1997
2027
Any time
LIBOR + 0.55%
Quarterly
J.P. Morgan Chase Capital X
1,000
1,
015
2002
2032
Any time
7.00%
Quarterly
J.P. Morgan Chase Capital XI
1,075
1,
004
2003
2033
Any time
5.88%
Quarterly
J.P. Morgan Chase Capital XII
400
390
2003
2033
Any time
6.25%
Quarterly
JPMorgan Chase Capital XIII
465
480
2004
2034
2014
LIBOR + 0.95%
Quarterly
JPMorgan Chase Capital XIV
600
586
2004
2034
Any time
6.20%
Quarterly
JPMorgan Chase Capital XV
9
3
132
2005
2035
Any time
5.88%
Semiannually
JPMorgan Chase Capital XVI
500
492
2005
2035
Any time
6.35%
Quarterly
JPMorgan Chase Capital XVII
496
558
2005
2035
Any time
5.85%
Semian
nually
JPMorgan Chase Capital XVIII
748
749
2006
2036
Any time
6.95%
Semiannually
JPMorgan Chase Capital XIX
563
564
2006
2036
2011
6.63%
Quarterly
JPMorgan Chase Capital XX
995
996
2006
2036
Any time
6.55%
Semiannually
JPMorgan Chase
Capital XXI
836
837
2007
2037
2012
LIBOR + 0.95%
Quarterly
JPMorgan Chase Capital XXII
996
997
2007
2037
Any time
6.45%
Semiannually
JPMorgan Chase Capital XXIII
643
643
2007
2047
2012
LIBOR + 1.00%
Quarterly
JPMorgan Chase Capital XX
IV
700
700
2007
2047
2012
6.88%
Quarterly
JPMorgan Chase Capital XXV
1,492
1,
844
2007
2037
2037
6.80%
Semiannually
JPMorgan Chase Capital XXVI
1,815
1,815
2008
2048
2013
8.00%
Quarterly
JPMorgan Chase Capital XXVI
I
995
995
2009
2039
2039
7.0
0%
Semiannually
JPMorgan Chase Capital XXVIII
1,500
1,500
2009
2039
2014
7.2
0%
Quarterly
JPMorgan Chase Capital XXIX
1,500
1,500
2010
2040
2015
6.70%
Quarterly
Total
$ 19,678 $ 20,331
(a) Represents the amount of trust preferred capital debt securities issued to the public by each trust, including unamortized original issue discount.
(b) Represents the principal amount of JPMorgan Chase debentures issued to each trust, including unamortized original-issue discount. The principal amount of debentures
issued to the trusts includes the impact of hedging and purchase accounting fair value adjustments that were recorded on the Firm’s Consolidated Financial Statements.