Long-Term Debt

6 Months Ended

Jun. 30, 2012

Commercial Paper and Other Short-Term Borrowings and Long-Term Debt [Abstract]

Long-Term Debt

Note 7—Long-Term Debt

The following is a summary of the Company’s long-term debt:

(Dollars in millions)	June 30, 2012		December 31, 2011
Senior debt:
Fixed and floating rate Federal Home Loan Bank advances with maturities ranging from January 2013 to February 2016. These notes bear a combined weighted-average rate of 1.64% at June 30, 2012 and 1.75% at December 31, 2011	$	3,000	$	3,625
Floating rate notes due March 2012. These notes, which bear interest at 0.20% above 3-month LIBOR, had a rate of 0.76% at December 31, 2011		—		500
Floating rate notes due June 2014. These notes, which bear interest at 0.95% above 3-month LIBOR, had a rate of 1.42% at June 30, 2012 and 1.48% at December 31, 2011		300		300
Fixed rate 2.125% notes due December 2013		399		399
Fixed rate 3.00% notes due June 2016		698		698
Fixed rate 2.125% notes due June 2017		499		—
Fixed rate 3.50% notes due June 2022		397		—
Note payable:
Fixed rate 6.03% notes due July 2014 (related to consolidated VIE)		8		8
Subordinated debt:
Fixed rate 5.25% notes due December 2013		409		413
Fixed rate 5.95% notes due May 2016		734		741
Total long-term debt	$	6,444	$	6,684

On June 18, 2012, the Bank issued $500 million aggregate principal amount of 2.125 percent Senior Notes due 2017 (2017 Senior Notes). The 2017 Senior Notes were issued at a purchase price of 99.699 percent. The 2017 Senior Notes are not redeemable at the option of the Bank prior to maturity or subject to repayment at the option of the holders prior to maturity. The 2017 Senior Notes bear interest of 2.125 percent per annum payable semi-annually and mature on June 16, 2017. The net proceeds from the issuance of the 2017 Senior Notes will be used by the Bank for general corporate purposes in the ordinary course of its banking business.

The 2017 Senior Notes were issued as part of the Bank’s $8 billion bank note program under which the Bank may issue, from time to time, senior unsecured debt obligations with maturities of more than one year from their respective dates of issue and subordinated debt obligations with maturities of five years or more from their respective dates of issue. After issuing the 2017 Senior Notes, there is $4.7 billion available for issuance under the program.

On June 18, 2012, the Company issued $400 million in aggregate principal amount of its 3.50 percent Senior Notes due 2022 (2022 Senior Notes). The 2022 Senior Notes were issued at a purchase price of 99.20 percent. The 2022 Senior Notes bear interest at the rate of 3.50 percent per year payable semi-annually and mature on June 18, 2022. The Company may, at its option at any time, redeem the 2022 Senior Notes, in whole or in part, at a redemption price equal to the greater of (1) 100 percent of the principal amount of the 2022 Senior Notes to be redeemed, and (2) the sum of the present values of the remaining scheduled payments of principal and interest in respect of the 2022 Senior Notes to be redeemed, discounted to the date of redemption on a semi-annual basis at a certain treasury rate plus 30 basis points plus, accrued interest to the date of redemption. The 2022 Senior Notes are senior unsecured obligations of the Company and rank senior to all of its existing and future subordinated debt and rank equally in right of payment with all of its existing and future unsecured and unsubordinated debt. However, the 2022 Senior Notes are structurally subordinated to all indebtedness of the Company’s subsidiaries, including the Bank and its Senior Notes.