Debt

Short-term Borrowings

The following table presents the composition of our short-term borrowings portfolio.



	2016							2015
December 31, ($ in millions)	Unsecured		Secured (a)		Total			Unsecured		Secured (a)		Total
Demand notes	$	3,622	$	—	$	3,622		$	3,369	$	—	$	3,369
Federal Home Loan Bank	—		7,875		7,875			—		4,000		4,000
Financial instruments sold under agreements to repurchase	—		1,176		1,176			—		648		648
Other	—		—		—			84		—		84
Total short-term borrowings	$	3,622	$	9,051	$	12,673		$	3,453	$	4,648	$	8,101
Weighted average interest rate (b)					1.0		%					0.8		%


(a)	Refer to the section below titled Long-term Debt for further details on assets restricted as collateral for payment of the related debt.


(b)	Based on the debt outstanding and the interest rate at December 31 of each year.

We periodically enter into term repurchase agreements, short-term borrowing agreements in which we sell financial instruments to one or more investors while simultaneously committing to repurchase them at a specified future date, at the stated price plus accrued interest. As of December 31, 2016, the financial instruments sold under agreement to repurchase consisted of $676 million of mortgage-backed residential securities maturing within 31 to 60 days. For further details refer to Note 8 and Note 26 to the Consolidated Financial Statements. Additionally, the company sold asset-backed automotive financial instruments, which are our retained interests from certain on-balance sheet securitizations, subject to a repurchase agreement set to mature by July 2017 in exchange for $500 million which was recorded as a short-term secured borrowing. The asset-backed automotive financial instruments that we sold subject to the repurchase agreement are secured by finance receivables that we have securitized. Refer to Note 11 to the Consolidated Financial Statements for additional information on our securitization activities.

The primary risk associated with these repurchase agreements is that the counterparty will be unable to perform under the terms of the contract. As the borrower, we are exposed to the excess market value of the securities pledged over the amount borrowed. Daily mark-to-market collateral management is designed to limit this risk to the initial margin. However, should a counterparty declare bankruptcy or become insolvent, we may incur additional delays and costs. As of December 31, 2016, we placed cash collateral totaling $45 million with counterparties under these collateral arrangements associated with our repurchase agreements.

Long-term Debt

The following tables present the composition of our long-term debt portfolio.



December 31, ($ in millions)	Amount			Interest rate	Weighted-average interest rate (a)		Due date range
2016
Unsecured debt
Fixed rate (b)	$	17,155
Variable rate	1
Trust preferred securities	2,568
Fair value adjustment (c)	326
Total unsecured debt	20,050			0.68–8.00%	5.36	%	2017–2049
Secured debt
Fixed rate	17,935
Variable rate	16,154
Fair value adjustment	(11		)
Total secured debt (d) (e) (f)	34,078			0.63–4.55%	1.53	%	2017–2035
Total long-term debt	$	54,128
2015
Unsecured debt
Fixed rate (b)	$	17,657
Variable rate	375
Trust preferred securities	2,600
Fair value adjustment (c)	334
Total unsecured debt	20,966			0.37–8.13%	5.40	%	2016–2049
Secured debt
Fixed rate	20,511
Variable rate	24,760
Fair value adjustment (c)	(3		)
Total secured debt (d) (e) (f)	45,268			0.48–4.06%	1.18	%	2016–2035
Total long-term debt	$	66,234


(a)	Based on the debt outstanding and the interest rate at December 31 of each year excluding any impacts of interest rate hedges.


(b)	Includes subordinated debt of $1.4 billion and $1.1 billion at December 31, 2016, and 2015, respectively.


(c)	Represents the fair value adjustment associated with the application of hedge accounting on certain of our long-term debt positions. Refer to Note 22 to the Consolidated Financial Statements for additional information.


(d)	Includes $13.3 billion and $20.3 billion of VIE secured debt at December 31, 2016, and 2015, respectively.


(e)	Includes $14.8 billion and $19.9 billion of debt outstanding from the Automotive secured revolving credit facilities at December 31, 2016, and 2015, respectively.


(f)	Includes advances from the Federal Home Loan Bank of Pittsburgh of $6.1 billion and $5.4 billion at December 31, 2016, and December 31, 2015, respectively.



	2016							2015
December 31, ($ in millions)	Unsecured		Secured			Total		Unsecured		Secured			Total
Long-term debt
Due within one year	$	4,274	$	10,279		$	14,553	$	1,829	$	9,427		$	11,256
Due after one year	15,450		23,810			39,260		18,803		35,844			54,647
Fair value adjustment	326		(11		)	315		334		(3		)	331
Total long-term debt	$	20,050	$	34,078		$	54,128	$	20,966	$	45,268		$	66,234

The following table presents the scheduled remaining maturity of long-term debt at December 31, 2016, assuming no early redemptions will occur. The actual payment of secured debt may vary based on the payment activity of the related pledged assets.



($ in millions)	2017			2018			2019			2020			2021			2022 and thereafter			Fair value adjustment			Total
Unsecured
Long-term debt	$	4,365		$	3,700		$	1,681		$	2,212		$	638		$	8,454		$	326		$	21,376
Original issue discount	(91		)	(101		)	(39		)	(39		)	(43		)	(1,013		)	—			(1,326		)
Total unsecured	4,274			3,599			1,642			2,173			595			7,441			326			20,050
Secured
Long-term debt	10,279			8,156			7,334			4,248			2,481			1,591			(11		)	34,078
Total long-term debt	$	14,553		$	11,755		$	8,976		$	6,421		$	3,076		$	9,032		$	315		$	54,128

To achieve the desired balance between fixed- and variable-rate debt, we utilize interest rate swap agreements. The use of these derivative financial instruments had the effect of synthetically converting $2.1 billion of our fixed-rate debt into variable-rate obligations and $132 million of our variable-rate debt into fixed-rate obligations at December 31, 2016.

The following summarizes assets restricted as collateral for the payment of the related debt obligation primarily arising from securitization transactions accounted for as secured borrowings and repurchase agreements.



	2016					2015
December 31, ($ in millions)	Total			Ally Bank (a)		Total			Ally Bank (a)
Investment securities (b)	$	4,895		$	4,231	$	2,420		$	1,761
Mortgage assets held-for-investment and lending receivables	10,954			10,954		9,743			9,743
Consumer automotive finance receivables (b)	27,846			5,751		34,324			9,167
Commercial automotive finance receivables	19,487			19,280		19,623			19,177
Investment in operating leases, net	2,040			913		5,539			3,205
Total assets restricted as collateral (c) (d)	$	65,222		$	41,129	$	71,649		$	43,053
Secured debt	$	43,129	(e)	$	22,149	$	49,916	(e)	$	24,787


(a)	Ally Bank is a component of the total column.


(b)	A portion of the restricted investment securities and consumer automotive finance receivables are restricted under repurchase agreements. Refer to the section above titled Short-term Borrowings for information on the repurchase agreements.

(c)

Ally Bank has an advance agreement with the FHLB, and had assets pledged to secure borrowings that were restricted as collateral to the FHLB totaling $19.0 billion and $14.9 billion at December 31, 2016, and December 31, 2015, respectively. These assets were composed primarily of consumer mortgage finance receivables and loans, net, and investment securities. Ally Bank has access to the Federal Reserve Bank Discount Window. Ally Bank had assets pledged and restricted as collateral to the Federal Reserve Bank totaling $2.4 billion and $2.9 billion at December 31, 2016, and December 31, 2015, respectively. These assets were composed of consumer automotive finance receivables and loans, net, and investment in operating leases, net. Availability under these programs is only for the operations of Ally Bank and cannot be used to fund the operations or liabilities of Ally or its subsidiaries.


(d)	Excludes restricted cash and cash reserves for securitization trusts recorded within other assets on the Consolidated Balance Sheet. Refer to Note 14 to the Consolidated Financial Statements for additional information.


(e)	Includes $9.1 billion and $4.6 billion of short-term borrowings at December 31, 2016, and December 31, 2015, respectively.

Trust Preferred Securities

At December 31, 2016, we have issued and outstanding approximately $2.6 billion in aggregate liquidation preference of 8.125% Fixed Rate / Floating Rate Trust Preferred Securities, Series 2 (Series 2 TRUPS). Each Series 2 TRUPS security has a liquidation amount of $25. Distributions are cumulative and are payable until redemption at the applicable coupon rate. Distributions were payable at an annual rate of 8.125% payable quarterly in arrears, through but excluding February 15, 2016. From and including February 15, 2016, to but excluding February 15, 2040, distributions will be payable at an annual rate equal to three-month London interbank offer rate plus 5.785% payable quarterly in arrears, beginning May 15, 2016. Ally has the right to defer payments of interest for a period not exceeding 20 consecutive quarters. The Series 2 TRUPS have no stated maturity date, but must be redeemed upon the redemption or maturity of the related debentures (Debentures), which mature on February 15, 2040. Ally at any time on or after February 15, 2016, may redeem the Series 2 TRUPS at a redemption price equal to 100% of the principal amount being redeemed, plus accrued and unpaid interest through the date of redemption. The Series 2 TRUPS are generally nonvoting, other than with respect to certain limited matters. During any period in which any Series 2 TRUPS remain outstanding but in which distributions on the Series 2 TRUPS have not been fully paid, none of Ally or its subsidiaries will be permitted to (i) declare or pay dividends on, make any distributions with respect to, or redeem, purchase, acquire or otherwise make a liquidation payment with respect to, any of Ally’s capital stock or make any guarantee payment with respect thereto; or (ii) make any payments of principal, interest, or premium on, or repay, repurchase or redeem, any debt securities or guarantees that rank on a parity with or junior in interest to the Debentures with certain specified exceptions in each case.

Covenants and Other Requirements

In secured funding transactions, there are trigger events that could cause the debt to be prepaid at an accelerated rate or could cause our usage of the credit facility to be discontinued. The triggers are generally based on the financial health and performance of the servicer as well as performance criteria for the pool of receivables, such as delinquency ratios, loss ratios, and commercial payment rates. During 2016, there were no trigger events that resulted in the repayment of debt at an accelerated rate or impacted the usage of our credit facilities.

In December 2016, we closed a private unsecured committed funding facility that contains covenants requiring us to maintain minimum levels of liquidity and capital. At December 31, 2016, there was no debt outstanding under this facility and we were in compliance with all applicable covenants. This facility was fully drawn in January 2017. Refer to Note 32 for further information.

Funding Facilities

We utilize both committed credit facilities and other collateralized funding vehicles. The debt outstanding under our various funding facilities is included on our Consolidated Balance Sheet.

As of December 31, 2016, Ally Bank had exclusive access to $3.6 billion of funding capacity from committed credit facilities. Funding programs supported by the Federal Reserve and the FHLB, together with repurchase agreements, complement Ally Bank’s private collateralized funding vehicles.

The total capacity in our committed funding facilities is provided by banks through private transactions. The committed secured funding facilities can be revolving in nature and allow for additional funding during the commitment period, or they can be amortizing and not allow for any further funding after the closing date. At December 31, 2016, $17.5 billion of our $18.4 billion of committed capacity was revolving. Our revolving facilities generally have an original tenor ranging from 364 days to two years. As of December 31, 2016, we had $14.1 billion of committed funding capacity from revolving facilities with a remaining tenor greater than 364 days.

Committed Funding Facilities



	Outstanding				Unused capacity (a)				Total capacity
December 31, ($ in millions)	2016		2015		2016		2015		2016		2015
Bank funding
Secured (b)	$	3,250	$	3,250	$	350	$	—	$	3,600	$	3,250
Parent funding
Secured	11,550		16,914		1,975		251		13,525		17,165
Unsecured (c)	—		—		1,250		—		1,250		—
Total committed facilities	$	14,800	$	20,164	$	3,575	$	251	$	18,375	$	20,415


(a)	Funding from committed secured facilities is available on request in the event excess collateral resides in certain facilities or is available to the extent incremental collateral is available and contributed to the facilities.


(b)	Excludes off-balance sheet credit facility amounts.


(c)	This facility was fully drawn in January 2017. Refer to Note 32 for further information.