Fifth Third Bank 2011 Annual Report Download - page 117

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fifth Third Bancorp 115
16. LONG-TERM DEBT
The following table is a summary of the Bancorp’s long-term borrowings at December 31:
($ in millions) Maturity Interest Rate 2011 2010
Parent Company
Senior:
Fixed-rate notes 2013 6.25% $779 797
Fixed-rate notes 2016 3.625% 1,000 -
Subordinated:(b)
Floating-rate notes 2016 0.98% 250 250
Fixed-rate notes 2017 5.45% 589 613
Fixed-rate notes 2018 4.50% 581 584
Fixed-rate notes 2038 8.25% 1,348 1,034
J
unior subordinated:(a)
Fixed-rate notes(c) 2067 6.50% 750 750
Fixed-rate notes(c) 2067 7.25% 594 613
Fixed-rate notes(c) 2067 7.25% 894 907
Fixed-rate notes(c) - 400
Structured repurchase agreements:
Floating-rate notes 2013 2.49% 250 -
Floating-rate notes 2013 2.54% 125 -
Subsidiaries
Senior:
Floating-rate bank notes 2013 0.58% 500 499
Subordinated:(b)
Fixed-rate bank notes 2015 4.75% 561 561
J
unior subordinated:(a)
Floating-rate bank notes - 51
Floating-rate debentures - 67
Floating-rate debentures 2035 1.97% - 2.24% 62 62
FHLB advances 2012-2041 0.05% - 8.34% 1,055 1,561
Notes associated with consolidated VIEs:
Automobile loan securitizations:
Fixed-rate notes 2013 4.81% 2 99
Floating-rate notes 2013-2015 0.81% - 2.25% 169 460
Home equity securitization:
Floating-rate notes 2023 0.50% 22 133
Other 2012-2039 Varies 151 117
Total $9,682 9,558
(a) Qualify as Tier I capital for regulatory capital purposes. See Note 28 for further information.
(b) Qualify as Tier II capital for regulatory capital purposes.
(c) Future periods of debt are floating.
D
The Bancorp pays down long-term debt in accordance with
contractual terms over maturity periods summarized in the above
table. Contractually obligated payments for long-term debt as of
December 31, 2011 are due over the following periods: $8 million in
2012; $1.7 billion in 2013, $18 million in 2014, $738 million in 2015,
$2.3 billion in 2016 and $5.0 billion after 2016.
At December 31, 2011, the Bancorp had outstanding principal
balances of $9.0 billion, net discounts of $18 million and additions
for mark-to-market adjustments on its hedged debt of $662 million.
At December 31, 2010, the Bancorp had outstanding principal
balances of $9.1 billion, net discounts of $15 million and additions
for mark-to-market adjustments on its hedged debt of $439 million.
The Bancorp was in compliance with all debt covenants at
December 31, 2011.
PARENT COMPANY LONG-TERM BORROWINGS
Senior Notes
In April 2008, the Bancorp issued $750 million of senior notes to
third party investors. The senior notes bear a fixed rate of interest of
6.25% per annum. The Bancorp entered into interest rate swaps to
convert $675 million to floating rate and, at December 31, 2011 and
2010, paid a rate of 2.84% and 2.70%, respectively. The notes are
unsecured, senior obligations of the Bancorp. Payment of the full
principal amount of the notes will be due upon maturity on May 1,
2013. The notes are not subject to redemption at the Bancorp's
option at any time prior to maturity.
On January 25, 2011, the Bancorp issued $1.0 billion of senior
notes to third party investors. The Senior Notes bear a fixed rate of
interest of 3.625% per annum. The Bancorp entered into interest
rate swaps to convert $500 million to floating rate and, at December
31, 2011, paid a rate of 0.26%. The notes are unsecured, senior
obligations of the Bancorp. Payment of the full principal amounts
of the notes is due upon maturity on January 25, 2016. The notes
are not subject to redemption at the Bancorp’s option at any time
prior to maturity
Subordinated Debt
The subordinated floating-rate notes due in 2016 pay interest at
three-month LIBOR plus 42 bps. The Bancorp has entered into
interest rate swaps to convert its subordinated fixed-rate notes due
in 2017 and 2018 to floating-rate, which pay interest at three-month
LIBOR plus 42 bps and 25 bps, respectively, at December 31, 2011.
The rates paid on the swaps hedging the subordinated floating-rate