eTrade 2007 Annual Report Download - page 124

NOTE 15—CORPORATE DEBT
The Company’s corporate debt by type is shown below (dollars in thousands):
December 31, 2007 Face Value
Premium /
(Discount)
Fair Value
Adjustment(1) Net
Senior notes:
8% Notes, due 2011 $ 453,815 $ 1,884 $15,422 $ 471,121
7
3
⁄ 8 % Notes, due 2013 512,160 (1,555) 31,001 541,606
7
7
⁄ 8 % Notes, due 2015 248,177 — 11,838 260,015
Total senior notes 1,214,152 329 58,261 1,272,742
Springing lien notes 12
1
⁄ 2 %, due 2017 1,786,000 (481,609) — 1,304,391
Mandatory convertible notes 6
1
⁄ 8 %, due 2018 450,000 (4,435) — 445,565
Total corporate debt $3,450,152 $(485,715) $58,261 $3,022,698
December 31, 2006 Face Value
Premium /
(Discount)
Fair Value
Adjustment (1) Net
Senior notes:
8% Notes, due 2011 $ 500,000 $ 2,675 $ 1,058 $ 503,733
7
3
⁄ 8 % Notes, due 2013 600,000 (2,141) — 597,859
7
7
⁄ 8 % Notes, due 2015 300,000 — — 300,000
Total senior notes 1,400,000 534 1,058 1,401,592
Mandatory convertible notes 6
1
⁄ 8 %, due 2018 450,000 (9,423) — 440,577
Total corporate debt $1,850,000 $ (8,889) $ 1,058 $1,842,169
(1) The fair value adjustment is related to changes in fair value of the debt while in a fair value hedge relationship in accordance with SFAS
No. 133, as amended.
Senior Notes
All of the Company’s senior notes are unsecured and will rank equal in right of payment with all of the
Company’s existing and future unsubordinated indebtedness and will rank senior in right of payment to all our
existing and future subordinated indebtedness.
8% Senior Notes Due June 2011
In 2005 and 2004, the Company issued an aggregate principal amount of $100 million and $400 million in
senior notes due June 2011 (“8% Notes”), respectively. Interest is payable semi-annually and notes are
non-callable for four years and may then be called by the Company at a premium, which declines over time. Debt
issuance costs of $9.6 million are being amortized over the term of the senior notes.
In November 2007, $46.2 million of the 8% Notes were exchanged for an equal amount of the 12
1
⁄ 2 %
Springing Lien notes discussed below.
7
3
⁄ 8 % Senior Notes due September 2013
In 2005, the Company issued an aggregate principal amount of $600 million in senior notes due
September 2013 (“7
3
⁄ 8 % Notes”). Interest is payable semi-annually and the notes are non-callable for four years
and may then be called by the Company at a premium, which declines over time. Debt issuance costs of
$8.0 million are being amortized over the term of the notes.
In November 2007, $87.8 million of the 7
3
⁄ 8 % Notes were exchanged for an equal amount of the 12
1
⁄ 2 %
Springing Lien notes discussed below.
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