Long-Term Debt

Long-term debt consists of borrowings having an original maturity of one year or more. The following is a summary of the Company's long-term debt:



(Dollars in millions)	December 31, 2016		December 31, 2015
Debt issued by MUAH
Senior debt:
Floating rate senior notes due February 2018. These notes, which bear interest at 0.57% above 3-month LIBOR, had a rate of 1.46% at December 31, 2016 and 0.91% at December 31, 2015	$	250	$	250
Fixed rate 1.625% notes due February 2018	449		450
Fixed rate 2.25% notes due February 2020	997		1,000
Fixed rate 3.50% notes due June 2022	397		398
Fixed rate 3.00% notes due February 2025	496		498
Senior debt due to BTMU:
Floating rate debt due March 2020. This note, which bears interest at 0.86% above 3-month LIBOR, had a rate of 1.82% at December 31, 2016	545		—
Subordinated debt due to BTMU:
Floating rate subordinated debt due December 2023. This note, which bears interest at 1.38% above 3-month LIBOR, had a rate of 2.38% at December 31, 2016 and 1.98% at December 31, 2015	300		300
Junior subordinated debt payable to trusts:
Floating rate note due September 2036. This note had an interest rate of 2.66% at December 31, 2016 and 2.21% at December 31, 2015	36		36
Total debt issued by MUAH	3,470		2,932
Debt issued by MUB
Senior debt:
Fixed rate FHLB of San Francisco advances due February 2016. These notes had a combined weighted-average rate of 2.50% at December 31, 2015	—		500
Fixed rate 3.00% notes due June 2016	—		700
Fixed rate 1.50% notes due September 2016	—		499
Floating rate notes due September 2016. These notes, which bear interest at 0.75% above 3-month LIBOR, had a rate of 1.35% at December 31, 2015	—		500
Floating rate notes due May 2017. These notes, which bear interest at 0.40% above 3-month LIBOR, had a rate of 1.28% at December 31, 2016 and 0.73% at December 31, 2015	250		250
Fixed rate 2.125% notes due June 2017	500		499
Fixed rate 2.625% notes due September 2018	999		1,000
Fixed rate 2.250% notes due May 2019	500		502
Senior debt to BTMU⁽³⁾:
Floating rate debt due January 2018. This note, which bears interest at 0.85% above 1-month LIBOR, had a rate of 1.47% at December 31, 2016 and 1.09% at December 31, 2015	1,000		1,000
Floating rate debt due January 2018. This note, which bears interest at 0.87% above 1-month LIBOR, had a rate of 1.49% at December 31, 2016 and 1.11% at December 31, 2015	1,500		1,500
Floating rate debt due January 2018. This note, which bears interest at 1.03% above 1-month LIBOR, had a rate of 1.65% at December 31, 2016 and 1.27% at December 31, 2015	1,000		1,000
Subordinated debt:
Fixed rate 5.95% notes due May 2016	—		703
Subordinated debt due to BTMU:
Floating rate subordinated debt due June 2023. This note, which bears interest at 1.20% above 3-month LIBOR, had a rate of 2.20% at December 31, 2016 and 1.80% at December 31, 2015	750		750
Other	58		14
Total debt issued by MUB	6,557		9,417




Debt issued by other MUAH subsidiaries
Senior Debt due to BTMU:
Various floating rate borrowings due between November 2020 and April 2021. These notes, which bear interest above 3-month LIBOR had a weighted-average interest rate of 0.99% at December 31, 2016	250		—
Various fixed rate borrowings due between September 2019 and May 2023 with a weighted-average interest rate of 2.15% (between 1.71% and 2.44%) at December 31, 2016 and 2.10% (between 1.71% and 2.44%) at December 31, 2015	384		452
Subordinated Debt due to Affiliate:
Various floating rate borrowings due between March 2018 and March 2019. These notes, which bear interest above 6-month LIBOR had a weighted-average interest rate of 2.68% (between 2.61% and 2.77%) at December 31, 2016 and 1.91% (between 1.59% and 1.99%) at December 31, 2015	185		220
Nonrecourse Debt due to BTMU:
Various floating rate nonrecourse borrowings due to BTMU between June 2017 and December 2021. These notes, which bear interest above 1- or 3-month LIBOR had a weighted-average interest rate of 1.67% (between 0.25% and 2.41%) at December 31, 2016 and 1.72% (between 0.68% and 2.08%) at December 31, 2015	127		169
Nonrecourse Debt:
Fixed rate nonrecourse borrowings due December 2026 which had an interest rate of 5.34% at December 31, 2016 and a weighted average interest rate of 5.65% (between 5.34% and 8.67%) at December 31, 2015	39		46
Various floating rate nonrecourse borrowings due between July 2017 and May 2019. These notes, which bear interest above 1- or 3-month LIBOR had a weighted-average interest rate of 2.04% (between 0.85% and 2.73%) at December 31, 2016 and 1.82% (between 1.46% and 2.53%) at December 31, 2015	398		412
Total debt issued by other MUAH subsidiaries	1,383		1,299
Total long-term debt	$	11,410	$	13,648

Senior Debt

Certain of the debt issuances are repayable prior to maturity at the Company’s option at a redemption price equal to 100% of par plus accrued interest.

MUAH senior debt is issued under MUAH’s shelf registration statement with the SEC. In January 2015, MUAH filed a new shelf registration statement authorizing issuance of a total of $3.6 billion of debt and other securities, effectively terminating the prior shelf registration statement. In February 2015, MUAH issued an aggregate of $2.2 billion of senior notes from the new shelf registration statement. As of December 31, 2016, $1.4 billion of debt or other securities were available for issuance.

MUB senior debt is issued as part of MUB’s $12 billion bank note program under which MUB 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. At December 31, 2016 there is $5.9 billion available for issuance under the program.

MUAH Senior Debt due to BTMU

During the third quarter of 2016, MUAH borrowed $545 million from BTMU in the form of a senior loan. MUAH may prepay the loan prior to the stated maturity date in whole or in part and in an amount of not less than $500,000. BTMU may accelerate the payment of the loan, in the case of certain events of default.

MUB Senior Debt due to BTMU

MUB senior debt due to BTMU is an unsecured obligation. MUB may prepay the senior debt prior to the stated maturity date in whole or in part and in an amount of not less than $500,000. In the case of an event of default in respect to the BTMU Loan (which events are limited to certain bankruptcy or insolvency related events), BTMU may accelerate the payment of the BTMU Loan.

Senior Debt due to BTMU by other MUAH subsidiaries

MUAH’s subsidiaries also borrow on a long-term basis from BTMU. At December 31, 2016, $250 million of senior debt issued to BTMU was floating rate and linked to customer deposits maintained at BTMU’s New York Branch. An additional $384 million was fixed rate, amortizing funding tied to specific assets owned by MUAH’s subsidiaries.

FHLB Senior Debt

The Bank borrows periodically from the FHLB on a medium-term basis. The advances are secured by certain of the Bank's assets and bear either a fixed or a floating interest rate. The floating rates are tied to the three-month LIBOR plus a spread, reset every 90 days. As of December 31, 2016 and December 31, 2015, the Bank had $44.3 billion and $57.1 billion of pledged loans and securities, respectively, as collateral for short-term and medium-term advances from the Federal Reserve Bank and FHLB.

Subordinated Debt due to BTMU

The terms and conditions of the subordinated debt due to BTMU are equivalent to those which would apply in a similar transaction with a non-related party. The Bank may prepay the subordinated debt prior to the stated maturity in whole or in part on or after June 28, 2018, but only if the Bank obtains prior written approval of the OCC. MUAH may prepay the subordinated debt prior to the stated maturity date in whole or in part on or after December 27, 2018, but only if the Company obtains the prior written approval of the Federal Reserve. The subordinated debt due to BTMU is a junior obligation to MUAH’s and to the Bank's existing and future outstanding senior indebtedness, and qualifies as Tier 2 capital under the federal banking agency risk-based capital guidelines.

Subordinated Debt due to Affiliate

MUSA maintains subordinated funding provided by an affiliate. This subordinated debt is a junior obligation to MUSA’s existing and future outstanding senior indebtedness.

Nonrecourse Debt

Nonrecourse debt serves as funding for certain lease financings offered to customers. The lenders are secured by an interest in the underlying leased assets and have no recourse to the Company or its subsidiaries. Interest and principal on this debt is serviced entirely by the underlying assets and is not supported by the Company.