SunTrust 2014 Annual Report Download - page 137

Notes to Consolidated Financial Statements, continued
114
Long-term debt
Long-term debt at December 31 consisted of the following:
2014 2013
(Dollars in millions) Maturity Date(s) Interest Rate(s) Balance Balance
Parent Company Only:
Senior, fixed rate 2016 - 2028 2.35% - 6.00% $3,630 $3,001
Senior, variable rate 2015 - 2019 0.38 - 2.00 358 283
Subordinated, fixed rate 2026 6.00 200 200
Junior subordinated, variable rate 2027 - 2028 0.89 - 1.22 627 627
Total Parent Company debt (excluding intercompany of $0
and $160 at December 31, 2014 and 2013, respectively) 4,815 4,111
Subsidiaries 1:
Senior, fixed rate 22015 - 2053 0.00 - 9.65 5,682 1,006
Senior, variable rate 32015 - 2043 0.35 - 6.98 742 3,783
Subordinated, fixed rate 42015 - 2020 5.00 - 7.25 1,283 1,300
Subordinated, variable rate 2015 0.52 - 0.54 500 500
Total subsidiaries debt 8,207 6,589
Total long-term debt $13,022 $10,700
1 90% and 85% of total subsidiaries debt is issued by the Bank at December 31, 2014 and 2013, respectively.
2 Includes leases and other obligations that do not have a stated interest rate.
3 Includes $0 and $256 million of debt recorded at fair value at December 31, 2014 and 2013, respectively.
4 Debt recorded at fair value.
The Company held no foreign denominated debt at December
31, 2014 and 2013. Maturities of long-term debt at December 31,
2014 were as follows:
(Dollars in millions) Parent
Company Subsidiaries
2015 $28 $1,791
2016 1,054 72
2017 1,232 4,332
2018 774 514
2019 891 30
Thereafter 836 1,468
Total $4,815 $8,207
During 2014, the Bank issued $250 million of floating rate senior
notes that pay a coupon rate of 3-month LIBOR plus 44 basis
points and $600 million of fixed rate senior notes that pay a
coupon rate of 1.35% under the Global Bank Note program.
These notes mature in 2017 and can be called beginning one
month prior to their maturity date. Furthermore, the Bank added
a $1.0 billion long-term FHLB advance during 2014. The Parent
Company issued $650 million of fixed rate senior notes that pay
a coupon rate of 2.50%. These notes mature in 2019 and can be
called beginning one month prior to their maturity date. The
Company had no additional material issuances, advances,
repurchases, or extinguishments of long-term debt during the
year.
Restrictive provisions of several long-term debt agreements
prevent the Company from creating liens on, disposing of, or
issuing (except to related parties) voting stock of subsidiaries.
Furthermore, there are restrictions on mergers, consolidations,
certain leases, sales or transfers of assets, minimum shareholders’
equity, and maximum borrowings by the Company. At
December 31, 2014, the Company was in compliance with all
covenants and provisions of long-term debt agreements. As
currently defined by federal bank regulators, long-term debt of
$627 million qualified as Tier 1 capital at both December 31,
2014 and 2013, and long-term debt of $792 million and $1.1
billion qualified as Tier 2 capital at December 31, 2014 and 2013,
respectively.
The Company does not consolidate certain wholly-owned
trusts which were formed for the sole purpose of issuing trust
preferred securities. The proceeds from the trust preferred
securities issuances were invested in junior subordinated
debentures of the Parent Company. The obligations of these
debentures constitute a full and unconditional guarantee by the
Parent Company of the trust preferred securities.
Contractual Commitments
In the normal course of business, the Company enters into certain
contractual arrangements. Such arrangements include
obligations to make future payments on lease arrangements,
contractual commitments for capital expenditures, and service
contracts.