Medium- And Long-Term Debt

12 Months Ended

Dec. 31, 2019

MEDIUM- AND LONG-TERM DEBT

Medium- and long-term debt is summarized as follows:



(in millions)
December 31	2019		2018
Parent company
Subordinated notes:
3.80% subordinated notes due 2026 (a)	$	264	$	250
Medium- and long-term notes:
2.125% notes due 2019 (a)	—		348
3.70% notes due 2023 (a)	884		861
4.00% notes due 2029 (a)	587		—
Total medium- and long-term notes	1,471		1,209
Total parent company	1,735		1,459
Subsidiaries
Subordinated notes:
4.00% subordinated notes due 2025 (a)	360		343
7.875% subordinated notes due 2026 (a)	202		198
Total subordinated notes	562		541
Medium- and long-term notes:
2.50% notes due 2020 (a)	674		663
2.50% notes due 2024 (a)	498		—
Total medium- and long-term notes	1,172		663
Federal Home Loan Bank (FHLB) advances:
Floating-rate based on FHLB auction rate due 2026	2,800		2,800
Floating-rate based on FHLB auction rate due 2028	1,000		1,000
Total FHLB advances	3,800		3,800
Total subsidiaries	5,534		5,004
Total medium- and long-term debt	$	7,269	$	6,463


(a)	The fixed interest rates on these notes have been swapped to a variable rate and designated in a hedging relationship. Accordingly, carrying value has been adjusted to reflect the change in the fair value of the debt as a result of changes in the benchmark rate.

Subordinated notes with remaining maturities greater than one year qualify as Tier 2 capital.

The Bank, a wholly-owned subsidiary of the Corporation, is a member of the FHLB, which provides short- and long-term funding to its members through advances collateralized by real-estate related assets. The interest rate on the FHLB advances resets between four and eight weeks, based on the FHLB auction rate. At December 31, 2019, the weighted-average rate on the FHLB advances was 1.75%. Each note may be prepaid in full, without penalty, at each scheduled reset date. Borrowing capacity is contingent upon the amount of collateral available to be pledged to the FHLB. At December 31, 2019, $17.2 billion of real estate-related loans were pledged to the FHLB as blanket collateral for current and potential future borrowings of approximately $5.1 billion.

The Corporation issued $350 million of 4.00% senior notes maturing in 2029, swapped to a floating rate at 30-day LIBOR plus 129 basis points in first quarter 2019 and issued an additional $200 million of 4.00% senior notes maturing in 2029 in third quarter 2019, swapped to a floating rate at 30-day LIBOR plus 123 basis points. These notes were consolidated under a single series with an aggregate principal amount of $550 million.

Also in third quarter 2019, the Bank issued $500 million of 2.50% medium-term notes due in 2024, swapped to a floating rate based on 30-day LIBOR plus 84 basis points.

Unamortized debt issuance costs deducted from the carrying amount of medium- and long-term debt totaled $12 million and $8 million at December 31, 2019 and 2018, respectively.

At December 31, 2019, the principal maturities of medium- and long-term debt were as follows:



(in millions)
Years Ending December 31
2020	$	675
2021	—
2022	—
2023	850
2024	500
Thereafter	5,100
Total	$	7,125