Comerica 2008 Annual Report Download - page 59

Commercial Commitments
Expected Expiration Dates by Period
Less than 1–3 3–5 More than
December 31, 2008 Total 1 Year Years Years 5 Years
(in millions)
Commitments to purchase investment securities ..... $ 1,312 $ 1,312 $ — $ — $ —
Commitments to sell investment securities ......... 10 10 — — —
Commitments to fund private equity and venture
capital investments ........................ 3613725
Unused commitments to extend credit ............ 28,025 12,287 9,420 4,436 1,882
Standby letters of credit and financial guarantees .... 6,240 3,894 1,429 858 59
Commercial letters of credit ................... 156 140 16 — —
Total commercial commitments ............... $35,779 $17,644 $10,868 $5,301 $1,966
Since many of these commitments expire without being drawn upon, the total amount of these commercial
commitments does not necessarily represent the future cash requirements of the Corporation. Refer to the
‘‘Other Market Risks’’ section below and Note 20 to the consolidated financial statements for a further
discussion of these commercial commitments.
Since market disruptions began in the latter half of 2008, it has been increasingly difficult for market
participants to borrow funds with maturities beyond one year. The Corporation satisfies liquidity requirements
with various funding sources. The Corporation may access the purchased funds market, which is comprised of
certificates of deposit issued to institutional investors in denominations in excess of $100,000 and to retail
customers in denominations of less than $100,000 through brokers (‘‘other time deposits’’ on the consolidated
balance sheets), foreign office time deposits and short-term borrowings. Purchased funds totaled $9.5 billion at
December 31, 2008, compared to $10.2 billion and $7.8 billion at December 31, 2007 and 2006, respectively.
Capacity for incremental purchased funds at December 31, 2008 consisted mostly of federal funds purchased,
brokered certificates of deposits, securities sold under agreements to repurchase and borrowings under the
Federal Reserve Term Auction Facility. In February 2008, the Bank became a member of the Federal Home
Loan Bank of Dallas, Texas (FHLB), which provides short- and long-term funding to its members through
advances collateralized by real estate-related assets. The actual borrowing capacity is contingent on the amount
of collateral available to be pledged to the FHLB. As of December 31, 2008, the Corporation had $8.0 billion of
outstanding borrowings from the FHLB with original maturities ranging from 1-6 years, and substantial
collateral to support additional borrowings. Another source of funding, if needed, would be liquid assets,
including cash and due from banks, federal funds sold and securities purchased under agreements to resell,
interest-bearing deposits with the Federal Reserve and other banks, other short-term investments and
investment securities available-for-sale, which totaled $12.8 billion at December 31, 2008, compared to
$8.1 billion at December 31, 2007. Additionally, the Corporation also had available approximately $10 billion
from a collateralized borrowing account with the Federal Reserve Bank and, if market conditions were to permit,
could issue up to $11.1 billion of debt under an existing $15 billion medium-term senior note program which
allows the principal banking subsidiary to issue debt with maturities between one and 30 years at December 31,
2008.
In addition, as previously discussed, in the fourth quarter 2008, the Corporation elected to participate in the
TLG Program announced by the FDIC in October 2008. Under the TLG Program, up to $5.2 billion of senior
unsecured debt issued by the Bank between October 14, 2008 and June 30, 2009 with a maturity of more than
30 days is eligible to be guaranteed by the FDIC. Debt guaranteed by the FDIC is backed by the full faith and
credit of the United States. The guarantee expires at the earlier of the maturity date of the issued debt or June 30,
2012. All senior unsecured debt issued under the TLG Program will be subject to an annualized fee ranging
from 50 basis points to 100 basis points of the amount of debt, based on maturity. At December 31, 2008, there
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