Wells Fargo 2007 Annual Report Download - page 101

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Following is a summary of our long-term debt based on original maturity (reflecting unamortized debt discounts and premiums,
where applicable):
Note 14: Long-Term Debt
(in millions) December 31,
Maturity Stated 2007 2006
date(s) interest
rate(s)
Wells Fargo & Company (Parent only)
Senior
Fixed-Rate Notes (1) 2008-2035 2.70-6.75% $25,105 $21,225
Floating-Rate Notes (2) 2008-2047 Varies 31,679 21,917
Extendable Notes (3) 2008-2015 Varies 5,369 10,000
FixFloat Notes (1) 2010 5.51% through
mid-2008, varies 2,200 —
Market-Linked Notes (4) 2008-2018 2.89-5.57% 871 372
Convertible Debenture (5) 2033 Varies 3,000 3,000
Total senior debt – Parent 68,224 56,514
Subordinated
Fixed-Rate Notes (1) 2011-2023 4.625-6.65% 4,550 4,560
FixFloat Notes 2012 4.00% through
mid-2007, varies — 300
Total subordinated debt – Parent 4,550 4,860
Junior Subordinated
Fixed-Rate Notes (1)(6)(7)(8) 2031-2067 5.625-7.00% 4,342 4,022
Total junior subordinated debt – Parent 4,342 4,022
Total long-term debt – Parent 77,116 65,396
Wells Fargo Bank, N.A. and its subsidiaries (WFB, N.A.)
Senior
Fixed-Rate Notes (1) 2008-2019 1.16-4.24% 34 173
Floating-Rate Notes 2008-2012 Varies 504 2,174
FHLB Notes and Advances 2012 5.20% 203 203
Market-Linked Notes (4) 2008-2026 0.53-5.75% 658 985
Obligations of subsidiaries under capital leases (Note 7) 20 12
Total senior debt – WFB, N.A. $ 1,419 $ 3,547
(1) We entered into interest rate swap agreements for substantially all of these notes, whereby we receive fixed-rate interest payments approximately equal to interest
on the notes and make interest payments based on an average one-month or three-month London Interbank Offered Rate (LIBOR).
(2) We entered into interest rate swap agreements for a significant portion of these notes, whereby we receive variable-rate interest payments and make interest payments
based on a fixed rate.
(3) The extendable notes are floating-rate securities with an initial maturity of 13 or 24 months, which can be extended on a rolling monthly or quarterly basis, respectively,
to a final maturity of five years at the investor’s option.
(4) Consists of long-term notes where the performance of the note is linked to an embedded equity, commodity, or currency index, or basket of indices accounted for
separately from the note as a free-standing derivative. For information on embedded derivatives, see Note 16 – Free-standing derivatives.
(5) On April 15, 2003, we issued $3 billion of convertible senior debentures as a private placement. In November 2004, we amended the indenture under which the
debentures were issued to eliminate a provision in the indenture that prohibited us from paying cash upon conversion of the debentures if an event of default as
defined in the indenture exists at the time of conversion. We then made an irrevocable election under the indenture on December 15, 2004, that upon conversion
of the debentures, we must satisfy the accreted value of the obligation (the amount accrued to the benefit of the holder exclusive of the conversion spread) in cash
and may satisfy the conversion spread (the excess conversion value over the accreted value) in either cash or stock. All or some of the convertible debt securities
may be redeemed in certain circumstances for cash at any time on or after May 5, 2008, at their principal amount plus accrued interest, if any.
(6) Effective December 31, 2003, as a result of the adoption of FIN 46 (revised December 2003), Consolidation of Variable Interest Entities (FIN 46(R)), we deconsolidated
certain wholly-owned trusts formed for the sole purpose of issuing trust preferred securities (the Trusts). The junior subordinated debentures held by the Trusts are
included in the Company’s long-term debt.
(7) On December 5, 2006, Wells Fargo Capital X issued 5.95% Capital Securities and used the proceeds to purchase from the Parent 5.95% Capital Efficient Notes (the
Notes) due 2086 (scheduled maturity 2036). When it issued the Notes, the Parent entered into a Replacement Capital Covenant (the Covenant) in which it agreed for
the benefit of the holders of the Parent’s 5.625% Junior Subordinated Debentures due 2034 that it will not repay, redeem or repurchase, and that none of its subsidiaries
will purchase, any part of the Notes or the Capital Securities on or before December 1, 2066, unless the repayment, redemption or repurchase is made from the net cash
proceeds of the issuance of certain qualified securities and pursuant to the other terms and conditions set forth in the Covenant. For more information, refer to the
Covenant, which was filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed December 5, 2006.
(8) On May 25, 2007, Wells Fargo Capital XI issued 6.25% Enhanced Trust Preferred Securities (Enhanced TRUPS®) (the 2007 Capital Securities) and used the proceeds to
purchase from the Parent 6.25% Junior Subordinated Deferrable Interest Debentures due 2067 (the 2007 Notes). When it issued the 2007 Notes, the Parent entered into
a Replacement Capital Covenant (the 2007 Covenant) in which it agreed for the benefit of the holders of the Parent’s 5.625% Junior Subordinated Debentures due 2034
that it will not repay, redeem or repurchase, and that none of its subsidiaries will purchase, any part of the 2007 Notes or the 2007 Capital Securities on or before June 15,
2057, unless the repayment, redemption or repurchase is made from the net cash proceeds of the issuance of certain qualified securities and pursuant to the other terms
and conditions set forth in the 2007 Covenant. For more information, refer to the 2007 Covenant, which was filed as Exhibit 99.1 to the Company’s Current Report on
Form 8-K filed May 25, 2007.
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