PNC Bank 2011 Annual Report Download - page 173

Trust Date Formed Description of Capital Securities Redeemable
Sterling Financial Statutory Trust V March 2007 $20 million due March 15, 2037 at a fixed
rate of 7%. The fixed rate remained in effect
until June 15, 2007 at which time the
securities began paying a floating rate of 3-
month LIBOR plus 165 basis points. The
rate in effect at December 31, 2011 was
2.196%.
March 15, 2012 at par.
National City Capital Trust III May 2007 $500 million due May 25, 2067 at a fixed
rate of 6.625%. The fixed rate remains in
effect until May 25, 2047 at which time the
securities pay a floating rate of one-month
LIBOR plus 212.63 basis points.
On or after May 25, 2012 at par.
National City Capital Trust IV August 2007 $518 million due August 30, 2067 at a fixed
rate of 8.00%. The fixed rate remains in
effect until September 15, 2047 at which
time the securities pay a floating rate of one-
month LIBOR plus 348.7 basis points.
On or after August 30, 2012 at par.
National City Preferred Capital Trust I January 2008 $500 million due December 10, 2043 at a
fixed rate of 12.00%. The fixed rate remains
in effect until December 10, 2012 at which
time the interest rate resets to 3-month
LIBOR plus 861 basis points.
On or after December 10, 2012 at par.
PNC Capital Trust E February 2008 $450 million of 7.75% capital securities due
March 15, 2068.
On or after March 15, 2013 at par.*
* If we redeem or repurchase the trust preferred securities of, and the junior subordinated notes payable to, PNC Capital Trust E during the period from March 15, 2038 through
March 15, 2048, we are subject to the terms of a replacement capital covenant requiring PNC to have received proceeds from the issuance of certain qualified securities prior to the
redemption or repurchase, unless the replacement capital covenant has been terminated pursuant to its terms. As of December 31, 2011, the beneficiaries of this limitation are the
holders of our $300 million of 6.125% Junior Subordinated Notes issued December 2003.
All of these Trusts are wholly owned finance subsidiaries of
PNC. In the event of certain changes or amendments to
regulatory requirements or federal tax rules, the capital
securities are redeemable in whole. In accordance with GAAP,
the financial statements of the Trusts are not included in
PNC’s consolidated financial statements.
At December 31, 2011, PNC’s junior subordinated debt with a
carrying value of $2.4 billion represented debentures
purchased and held as assets by the Trusts.
The obligations of the respective parent of each Trust, when
taken collectively, are the equivalent of a full and
unconditional guarantee of the obligations of such Trust under
the terms of the Capital Securities. Such guarantee is
subordinate in right of payment in the same manner as other
junior subordinated debt. There are certain restrictions on
PNC’s overall ability to obtain funds from its subsidiaries. For
additional disclosure on these funding restrictions, including
an explanation of dividend and intercompany loan limitations,
see Note 21 Regulatory Matters. PNC is also subject to
restrictions on dividends and other provisions potentially
imposed under the Exchange Agreements with Trust II and
Trust III as described in the following Perpetual Trust
Securities section and to other provisions similar to or in some
ways more restrictive than those potentially imposed under
those agreements. In September 2010, we redeemed all of the
underlying capital securities of Sterling Financial Statutory
Trust II, Yardville Capital Trusts II and IV, and James
Monroe Statutory Trust II. The capital securities redeemed
totaled $71 million. In October 2010, we redeemed all of the
underlying capital securities of Yardville Capital Trust V. The
capital securities redeemed totaled $10 million. In November
2011, we redeemed all of the underlying capital securities of
National City Capital Trust II. The capital securities redeemed
totaled $750 million.
Perpetual Trust Securities Summary
We have issued certain hybrid capital vehicles that currently qualify as capital for regulatory purposes.
Date Entity (a) Private Placement (b) Rate Trust Issuing Notes (c)
February 2008 PNC Preferred Funding LLC $375 million 8.700% PNC Preferred Funding Trust III (d)
March 2007 PNC Preferred Funding LLC $500 million 6.113% PNC Preferred Funding Trust II (e)
December 2006 PNC Preferred Funding LLC $500 million 6.517% PNC Preferred Funding Trust I (f)
(a) PNC REIT Corp. owns 100% of the LLC’s common voting securities. As a result, the LLC is an indirect subsidiary of PNC and is consolidated on PNC’s Consolidated Balance Sheet.
(b) Fixed-to-Floating Rate Non-Cumulative Exchangeable Perpetual Trust Securities.
(c) The trusts investments in the LLC’s preferred securities are characterized as a noncontrolling interest on our Consolidated Balance Sheet. This noncontrolling interest totaled
approximately $1.3 billion at December 31, 2011.
(d) Automatically exchangeable into a share of Series J Non-Cumulative Perpetual Preferred Stock of PNC.
(e) Automatically exchangeable into a share of Series I Non-Cumulative Perpetual Preferred Stock of PNC (Series I Preferred Stock).
(f) Automatically exchangeable into a share of Series F Non-Cumulative Perpetual Preferred Stock of PNC Bank, N.A. (PNC Bank Preferred Stock).
164 The PNC Financial Services Group, Inc. – Form 10-K