JP Morgan Chase 2015 Annual Report Download - page 290

Notes to consolidated financial statements
280 JPMorgan Chase & Co./2015 Annual Report
(c) Included $33.1 billion and $30.2 billion of long-term debt accounted for at fair value at December 31, 2015 and 2014, respectively.
(d) Included $5.5 billion and $2.9 billion of outstanding zero-coupon notes at December 31, 2015 and 2014, respectively. The aggregate principal amount of these
notes at their respective maturities is $16.2 billion and $7.5 billion, respectively. The aggregate principal amount reflects the contractual principal payment at
maturity, which may exceed the contractual principal payment at the Firm’s next call date, if applicable.
(e) Included on the Consolidated balance sheets in beneficial interests issued by consolidated VIEs. Also included $787 million and $2.2 billion accounted for at fair
value at December 31, 2015 and 2014, respectively. Excluded short-term commercial paper and other short-term beneficial interests of $11.3 billion and $17.0
billion at December 31, 2015 and 2014, respectively.
(f) At December 31, 2015, long-term debt in the aggregate of $39.1 billion was redeemable at the option of JPMorgan Chase, in whole or in part, prior to maturity,
based on the terms specified in the respective instruments.
(g) The aggregate carrying values of debt that matures in each of the five years subsequent to 2015 is $50.6 billion in 2016, $49.5 billion in 2017, $39.2 billion in
2018, $30.4 billion in 2019 and $30.7 billion in 2020.
The weighted-average contractual interest rates for total
long-term debt excluding structured notes accounted for at
fair value were 2.34% and 2.42% as of December 31,
2015 and 2014, respectively. In order to modify exposure
to interest rate and currency exchange rate movements,
JPMorgan Chase utilizes derivative instruments, primarily
interest rate and cross-currency interest rate swaps, in
conjunction with some of its debt issues. The use of these
instruments modifies the Firm’s interest expense on the
associated debt. The modified weighted-average interest
rates for total long-term debt, including the effects of
related derivative instruments, were 1.64% and 1.50% as
of December 31, 2015 and 2014, respectively.
JPMorgan Chase & Co. has guaranteed certain long-term
debt of its subsidiaries, including both long-term debt and
structured notes. These guarantees rank on parity with the
Firm’s other unsecured and unsubordinated indebtedness.
The amount of such guaranteed long-term debt was $152
million and $352 million at December 31, 2015 and 2014,
respectively.
The Firm’s unsecured debt does not contain requirements
that would call for an acceleration of payments, maturities
or changes in the structure of the existing debt, provide any
limitations on future borrowings or require additional
collateral, based on unfavorable changes in the Firm’s credit
ratings, financial ratios, earnings or stock price.
Junior subordinated deferrable interest debentures held
by trusts that issued guaranteed capital debt securities
At December 31, 2015, the Firm had outstanding eight
wholly owned Delaware statutory business trusts (“issuer
trusts”) that had issued trust preferred securities.
The junior subordinated deferrable interest debentures
issued by the Firm to the issuer trusts, totaling $4.0 billion
and $5.4 billion at December 31, 2015 and 2014,
respectively, were reflected on the Firm’s Consolidated
balance sheets in long-term debt, and in the table on the
preceding page under the caption “Junior subordinated
debt.” The Firm also records the common capital securities
issued by the issuer trusts in other assets in its Consolidated
balance sheets at December 31, 2015 and 2014. Beginning
in 2014, the debentures issued to the issuer trusts by the
Firm, less the common capital securities of the issuer trusts,
began being phased out from inclusion as Tier 1 capital
under Basel III. As of December 31, 2015 and 2014, $992
million and $2.7 billion of these debentures qualified as
Tier 1 capital, while $3.0 billion and $2.7 billion qualified
as Tier 2 capital.