JP Morgan Chase 2008 Annual Report Download - page 206

Notes to consolidated financial statements
204 JPMorgan Chase & Co./ 2008 Annual Report
Under the TLG Program, the FDIC will pay the unpaid principal and
interest on an FDIC-guaranteed debt instrument upon the uncured
failure of the participating entity to make a timely payment of princi-
pal or interest in accordance with the terms of the instrument. The
guarantee of new obligations under the TLG Program is scheduled to
expire in October 2009.
JPMorgan Chase & Co. (Parent Company) has guaranteed certain debt
of its subsidiaries, including both long-term debt and structured notes
sold as part of the Firm’s market-making activities. These guarantees
rank on a parity with all of the Firm’s other unsecured and unsubordi-
nated indebtedness. Guaranteed liabilities totaled $4.8 billion and $4.7
billion at December 31, 2008 and 2007, respectively. For additional
information, see Note 2 on pages 135–140 of this Annual Report.
Junior subordinated deferrable interest debentures held by
trusts that issued guaranteed capital debt securities
At December 31, 2008, the Firm had established 24 wholly-owned
Delaware statutory business trusts (“issuer trusts”) that had issued
guaranteed capital debt securities.
The junior subordinated deferrable interest debentures issued by the
Firm to the issuer trusts, totaling $18.6 billion and $15.1 billion at
December 31, 2008 and 2007, respectively, were reflected in the
Firm’s Consolidated Balance Sheets in the liabilities section under the
caption “Junior subordinated deferrable interest debentures held by
trusts that issued guaranteed capital debt securities” (i.e., trust pre-
ferred capital debt securities). The Firm also records the common
capital securities issued by the issuer trusts in other assets in its
Consolidated Balance Sheets at December 31, 2008 and 2007.
The debentures issued to the issuer trusts by the Firm, less the com-
mon capital securities of the issuer trusts, qualify as Tier 1 capital.
The following is a summary of the outstanding trust preferred capital debt securities, including unamortized original issue discount, issued by each
trust, and the junior subordinated deferrable interest debenture issued to each trust as of December 31, 2008.
Amount of Principal Stated maturity
capital debt amount of of capital
securities debenture securities Earliest Interest rate of Interest
issued issued Issue and redemption capital securities payment/
December 31, 2008 (in millions) by trust(a) to trust(b) date debentures date and debentures distribution dates
Bank One Capital III $ 474 $ 764 2000 2030 Any time(c) 8.75% Semiannually
Bank One Capital VI 525 554 2001 2031 Any time(c) 7.20% Quarterly
Bear Stearns Capital Trust III 263 262 2001 2031 Any time(c) 7.80% Quarterly
Chase Capital II 496 511 1997 2027 Any time(c) LIBOR + 0.50% Quarterly
Chase Capital III 297 306 1997 2027 Any time(c) LIBOR + 0.55% Quarterly
Chase Capital VI 249 256 1998 2028 Any time(c) LIBOR + 0.625% Quarterly
First Chicago NBD Capital I 248 256 1997 2027 Any time(c) LIBOR + 0.55% Quarterly
J.P. Morgan Chase Capital X 1,000 1,014 2002 2032 Any time(c) 7.00% Quarterly
J.P. Morgan Chase Capital XI 1,075 995 2003 2033 Any time(c) 5.88% Quarterly
J.P. Morgan Chase Capital XII 400 388 2003 2033 Any time(c) 6.25% Quarterly
JPMorgan Chase Capital XIII 472 487 2004 2034 2014 LIBOR + 0.95% Quarterly
JPMorgan Chase Capital XIV 600 583 2004 2034 2009 6.20% Quarterly
JPMorgan Chase Capital XV 995 1,370 2005 2035 Any time(c) 5.88% Semiannually
JPMorgan Chase Capital XVI 500 490 2005 2035 2010 6.35% Quarterly
JPMorgan Chase Capital XVII 496 696 2005 2035 Any time(c) 5.85% Semiannually
JPMorgan Chase Capital XVIII 748 749 2006 2036 Any time(c) 6.95% Semiannually
JPMorgan Chase Capital XIX 562 564 2006 2036 2011 6.63% Quarterly
JPMorgan Chase Capital XX 995 996 2006 2036 Any time(c) 6.55% Semiannually
JPMorgan Chase Capital XXI 845 846 2007 2037 2012 LIBOR + 0.95% Quarterly
JPMorgan Chase Capital XXII 996 997 2007 2037 Any time(c) 6.45% Semiannually
JPMorgan Chase Capital XXIII 746 746 2007 2047 2012 LIBOR + 1.00% Quarterly
JPMorgan Chase Capital XXIV 700 700 2007 2047 2012 6.88% Quarterly
JPMorgan Chase Capital XXV 1,492 2,244 2007 2037 2037 6.80% Semiannually
JPMorgan Chase Capital XXVI 1,815 1,815 2008 2048 2013 8.00% Quarterly
Total $16,989 $18,589
(a) Represents the amount of capital securities issued to the public by each trust, including unamortized original issue discount.
(b) Represents the principal amount of JPMorgan Chase debentures issued to each trust, including unamortized original issue discount.The principal amount of debentures issued to the
trusts includes the impact of hedging and purchase accounting fair value adjustments that were recorded on the Firm’s Consolidated Financial Statements.
(c) Subject to Series K Preferred Stock restrictions, which are discussed in Note 24 below.