PNC Bank 2013 Annual Report Download - page 195

N OTE 14 C APITAL S ECURITIES OF S UBSIDIARY T RUSTS AND P ERPETUAL T RUST S ECURITIES
At December 31, 2013, PNC had $206 million in principal amount of an outstanding junior subordinated debenture associated with
$200 million of trust preferred securities that were issued by a subsidiary statutory trust. These trust preferred securities
represented non-voting preferred beneficial interests in the assets of the following Trust:
Table 108: Capital Securities of Subsidiary Trust
Trust Date Formed Description of Capital Securities Redeemable
PNC Capital Trust C June 1998 $200 million due June 1, 2028, bearing
interest at a floating rate per annum equal to
3-month LIBOR plus 57 basis points. The
rate in effect at December 31, 2013 was
.808%.
On or after June 1, 2008 at par.
This Trust is a wholly-owned finance subsidiary 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 Trust are not included in PNC’s consolidated
financial statements.
At December 31, 2013, PNC’s junior subordinated debt with a
carrying value of $205 million represented debentures
purchased and held as assets by the Trust and redeemable
prior to maturity.
The obligations of the parent of the Trust, when taken
collectively, are the equivalent of a full and unconditional
guarantee of the obligations of the 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 22
Regulatory Matters. PNC is also subject to restrictions on
dividends and other provisions potentially imposed under the
Exchange Agreement with PNC Preferred Funding Trust II, 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 that
agreement.
On April 23, 2013, we redeemed the $15 million of trust
preferred securities issued by the Yardville Capital Trust VI.
On May 23, 2013, we redeemed $30 million of trust preferred
securities issued by Fidelity Capital Trust III. On June 17,
2013 we redeemed the following trust preferred securities:
• $15 million issued by Sterling Financial Statutory
Trust III,
• $15 million issued by Sterling Financial Statutory
Trust IV,
• $20 million issued by Sterling Financial Statutory
Trust V,
• $30 million issued by MAF Bancorp Capital Trust I,
and
• $8 million issued by James Monroe Statutory
Trust III.
On July 23, 2013, we redeemed the $22 million of trust
preferred securities issued by Fidelity Capital Trust II. On
September 16, 2013, we redeemed the $35 million of trust
preferred securities issued by MAF Bancorp Capital Trust II.
Table 109: Perpetual Trust Securities Summary
We have issued certain hybrid capital vehicles that currently qualify as capital for regulatory purposes. The following table lists
those that are outstanding as of December 31, 2013.
Date Entity (a) Private Placement (b) Rate (c) Trust Issuing Notes (d)
March 2007 PNC Preferred Funding LLC $500 million 1.465% PNC Preferred Funding Trust II (e)
December 2006 PNC Preferred Funding LLC $500 million 1.893% 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) As of December 31, 2013.
(d) 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 $981 million at December 31, 2013.
(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).
The PNC Financial Services Group, Inc. – Form 10-K 177