SunTrust 2011 Annual Report Download - page 76
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Long-Term Debt
Long-term debt at December 31 consisted of the following:
Long-Term Debt
(Dollars in millions)
Parent Company Only
Senior, fixed rate 1
Senior, variable rate
Subordinated, fixed rate
Junior subordinated, fixed rate
Junior subordinated, variable rate
Total Parent Company debt
Subsidiaries
Senior, fixed rate
Senior, variable rate 2
Subordinated, fixed rate 3
Subordinated, variable rate
Total subsidiaries debt
Total long-term debt
2011
$2,719
1,527
200
1,197
651
6,294
350
2,504
1,260
500
4,614
$10,908
Table 23
2010
$922
1,512
200
1,693
651
4,978
2,640
3,443
2,087
500
8,670
$13,648
1 Debt recorded at fair value, $448 million and $460 million, at December 31, 2011 and 2010, respectively.
2 Debt recorded at fair value, $289 million and $290 million, at December 31, 2011 and 2010, respectively.
3 Debt recorded at fair value.
During the year ended December 31, 2011, our long-term debt decreased by $2.7 billion, or 20%. The change was predominantly
due to the maturity of $2.1 billion, three-year, 3.00% senior notes; $1.1 billion, five-year, variable rate foreign denominated
senior notes; and $852 million of our ten year 6.375% subordinated notes. During 2011, we also repurchased and retired $395
million and $101 million of junior subordinated notes that were due in 2036 and 2042, respectively. These decreases were
partially offset by our issuance of $1.0 billion of 3.60% senior notes that mature in 2016, and $750 million of 3.50% senior
notes that mature in 2017.
In November 2011, SunTrust Preferred Capital I successfully remarketed $102 million of our 5.588% junior subordinated
notes due 2042. In connection with the remarketing, we repurchased and retired all of these notes held by the Trust. As part
of the stock purchase contract between us and the Trust, we issued $103 million of preferred stock that the Trust purchased
with the proceeds from the remarketing. See the "Capital Resources" section below for further discussion of the Series B
Preferred Stock issued as part of this transaction.
CAPITAL RESOURCES
Our primary regulator, the Federal Reserve, measures capital adequacy within a framework that makes capital requirements
sensitive to the risk profiles of individual banking companies. The guidelines weight assets and off-balance sheet risk exposures
(RWA) according to predefined classifications, creating a base from which to compare capital levels. Tier 1 capital primarily
includes realized equity and qualified preferred instruments, less purchase accounting intangibles such as goodwill and core
deposit intangibles. Total capital consists of Tier 1 capital and Tier 2 capital, which includes qualifying portions of subordinated
debt, ALLL up to a maximum of 1.25% of RWA, and 45% of the unrealized gain on equity securities. Additionally, for purposes
of computing regulatory capital, mark to market adjustments related to our own creditworthiness for debt and index linked
CDs accounted for at fair value are excluded from regulatory capital.
Both the Company and the Bank are subject to minimum Tier 1 capital and Total capital ratios of 4% and 8%, respectively,
of RWA. To be considered “well-capitalized,” ratios of 6% and 10%, respectively, are required. Additionally, the Company
and the Bank are subject to requirements for the Tier 1 leverage ratio, which measures Tier 1 capital against average assets,
as calculated in accordance with regulatory guidelines. The minimum and well-capitalized leverage ratios are 3% and 5%,
respectively.