Huntington National Bank 2007 Annual Report Download - page 98

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Amounts above are reported net of unamortized discounts and adjustments related to hedging with derivative financial
instruments. The derivative instruments, principally interest rate swaps, are used to match the funding rates on certain assets by
hedging the cash flow variability associated with certain variable-rate debt by converting the debt to fixed-rate and hedging the fair
values of certain fixed-rate debt by converting the debt to a variable rate. See Note 20 for more information regarding such
financial instruments. All principal is due upon maturity of the note as described in the table above.
In 2007, $31.4 million of the junior subordinated debentures due in 2027 and 2028 were repurchased resulting in a gain of
$2.9 million and was recorded in other non-interest income.
Under FIN 46(R), certain wholly-owned trusts, which had been formed for the sole purpose of issuing trust preferred securities,
are not consolidated. 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 securities. The junior subordinated debentures held by the trust included in the Company’s long-term debt was $0.8 billion
as of December 31, 2007 and $0.3 billion in 2006.
13. OTHER LONG-TERM DEBT
At December 31, Huntington’s other long-term debt consisted of the following:
(in thousands) 2007 2006
At December 31,
The Huntington National Bank $ 715,465 $ 808,112
5.33% Securitization trust note payable due 2012
(1)
155,666 408,745
5.57% Securitization trust note payable due 2018
(2)
1,015,947 962,283
7.88% Class C preferred securities of REIT subsidiary, no maturity 50,000 50,000
Total other long-term debt $1,937,078 $2,229,140
(1) Variable effective rate at December 31, 2007, based on one month LIBOR + 0.33.
(2) Variable effective rate at December 31, 2007, based on one month LIBOR + 0.67.
Amounts above include values related to hedging with derivative financial instruments. The derivative instruments, principally
interest rate swaps, are used to match the funding rates on certain assets by hedging the cash flow variability associated with
certain variable-rate debt by converting the debt to fixed-rate and hedging the fair values of certain fixed-rate debt by converting
the debt to a variable rate. See Note 20 for more information regarding such financial instruments.
The weighted-average interest rate for other long-term debt was 5.23% and 5.48% at December 31, 2007 and 2006, respectively.
The securitization trust notes payable are collateralized by $1.4 billion in automobile loans held in the automobile trusts. The
terms of the other long-term debt obligations contain various restrictive covenants including limitations on the acquisition of
additional debt in excess of specified levels, dividend payments, and the disposition of subsidiaries. As of December 31, 2007,
Huntington was in compliance with all such covenants.
Other long-term debt maturities for the next five years are as follows: $0.2 billion in 2008; $0.2 billion in 2009; $0.3 billion in
2010; none in 2011; $0.2 billion in 2012 and $1.0 billion thereafter. These maturities are based upon the par values of long-term
debt.
14. SHAREHOLDERS’ EQUITY
CHANGE IN PAR VALUE AND SHARES AUTHORIZED
During the second quarter of 2007, Huntington amended its charter to, among other things, assign a par value of $0.01 to each
share of common stock. Shares of common stock previously had no assigned par value. Huntington also amended its charter to
increase the number of authorized shares of common stock from 500 million shares to 1.0 billion shares.
SHARE REPURCHASE PROGRAM
On April 20, 2006, the Company announced that its board of directors authorized a new program for the repurchase of up to
15 million shares of common stock (the 2006 Repurchase Program). The 2006 Repurchase Program does not have an expiration
date. The 2006 Repurchase Program cancelled and replaced the prior share repurchase program, authorized by the board of
directors in 2005. The Company announced its expectation to repurchase the shares from time to time in the open market or
through privately negotiated transactions depending on market conditions.
96
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS HUNTINGTON BANCSHARES INCORPORATED