Debt

Short-term Borrowings

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



	2017							2016
December 31, ($ in millions)	Unsecured		Secured (a)		Total			Unsecured		Secured (a)		Total
Demand notes	$	3,171	$	—	$	3,171		$	3,622	$	—	$	3,622
Federal Home Loan Bank	—		7,350		7,350			—		7,875		7,875
Financial instruments sold under agreements to repurchase	—		892		892			—		1,176		1,176
Total short-term borrowings	$	3,171	$	8,242	$	11,413		$	3,622	$	9,051	$	12,673
Weighted average interest rate (b)					1.5		%					1.0		%


(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, 2017, the financial instruments sold under agreements to repurchase consisted of $892 million of agency mortgage-backed residential debt securities set to mature as follows: $73 million within the next 30 days, $521 million within 31 to 60 days, and $298 million within 61 to 90 days. Refer to Note 8 and Note 26 for further details. Additionally, in December 2016, we sold asset-backed automotive financial instruments, which are our retained interests from certain on-balance sheet securitizations, subject to a repurchase agreement 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 were secured by finance receivables that we have securitized. Refer to Note 11 for additional information on our securitization activities. This repurchase agreement was terminated in September 2017.

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. In some instances, we may place or receive cash collateral with counterparties under collateral arrangements associated with our repurchase agreements. At December 31, 2017, we placed cash collateral totaling $10 million and received cash collateral totaling $1 million. At December 31, 2016, we placed cash collateral totaling $45 million.

Long-term Debt

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



December 31, ($ in millions)	Amount			Stated interest rate	Weighted-average stated interest rate (a)		Due date range
2017
Unsecured debt
Fixed rate (b)	$	12,820
Variable rate	1
Trust preferred securities (c)	2,570
Fair value adjustment (d)	240
Total unsecured debt	15,631			1.48–8.00%	5.68	%	2018–2049
Secured debt
Fixed rate	18,845
Variable rate (e)	9,782
Fair value adjustment (d)	(32		)
Total secured debt (f) (g) (h)	28,595			0.63–4.50%	1.96	%	2018–2036
Total long-term debt	$	44,226
2016
Unsecured debt
Fixed rate (b)	$	17,155
Variable rate	1
Trust preferred securities (c)	2,568
Fair value adjustment (d)	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 (d)	(11		)
Total secured debt (f) (g) (h)	34,078			0.63–4.55%	1.53	%	2017–2035
Total long-term debt	$	54,128


(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 at both December 31, 2017, and 2016.


(c)	Refer to the section below titled Trust Preferred Securities for further information.


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


(e)	Includes $8 million of long-term debt that does not have a stated interest rate.


(f)	Includes $10.2 billion and $13.3 billion of VIE secured debt at December 31, 2017, and 2016, respectively.


(g)	Includes $8.1 billion and $14.8 billion of debt outstanding from our automotive secured revolving credit facilities at December 31, 2017, and 2016, respectively.


(h)	Includes advances from the FHLB of Pittsburgh of $10.3 billion and $6.1 billion at December 31, 2017, and 2016, respectively.



	2017							2016
December 31, ($ in millions)	Unsecured		Secured			Total		Unsecured		Secured			Total
Long-term debt
Due within one year	$	3,482	$	7,499		$	10,981	$	4,274	$	10,279		$	14,553
Due after one year	11,909		21,128			33,037		15,450		23,810			39,260
Fair value adjustment	240		(32		)	208		326		(11		)	315
Total long-term debt	$	15,631	$	28,595		$	44,226	$	20,050	$	34,078		$	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 $3.8 billion and $2.1 billion of our fixed-rate debt into variable-rate obligations, and $3.4 billion and $132 million of our variable-rate debt into fixed-rate obligations at December 31, 2017, and 2016, respectively.

The following table presents the scheduled remaining maturity of long-term debt at December 31, 2017, 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)	2018			2019			2020			2021			2022			2023 and thereafter			Fair value adjustment			Total
Unsecured
Long-term debt	$	3,582		$	1,681		$	2,251		$	637		$	1,067		$	7,408		$	240		$	16,866
Original issue discount	(100		)	(39		)	(39		)	(43		)	(47		)	(967		)	—			(1,235		)
Total unsecured	3,482			1,642			2,212			594			1,020			6,441			240			15,631
Secured
Long-term debt	7,499			8,352			6,879			3,712			1,631			554			(32		)	28,595
Total long-term debt	$	10,981		$	9,994		$	9,091		$	4,306		$	2,651		$	6,995		$	208		$	44,226

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.



	2017					2016
December 31, ($ in millions)	Total (a)			Ally Bank		Total (a)			Ally Bank
Investment securities (b)	$	8,371		$	7,443	$	4,895		$	4,231
Mortgage assets held-for-investment and lending receivables	13,579			13,579		10,954			10,954
Consumer automotive finance receivables (b)	19,787			6,200		27,846			5,751
Commercial automotive finance receivables	16,567			16,472		19,487			19,280
Operating leases	457			—		2,040			913
Total assets restricted as collateral (c) (d)	$	58,761		$	43,694	$	65,222		$	41,129
Secured debt	$	36,837	(e)	$	23,278	$	43,129	(e)	$	22,149


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


(b)	A portion of the restricted investment securities at December 31, 2017, and December 31, 2016, and consumer automotive finance receivables at December 31, 2016, were 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 $25.2 billion and $19.0 billion at December 31, 2017, and December 31, 2016, respectively. These assets were composed primarily of consumer mortgage finance receivables and loans and investment securities. Ally Bank has access to the FRB Discount Window. Ally Bank had assets pledged and restricted as collateral to the FRB totaling $2.3 billion and $2.4 billion at December 31, 2017, and December 31, 2016, respectively. These assets were composed of consumer automotive finance receivables and loans and operating lease assets. 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 for additional information.


(e)	Includes $8.2 billion and $9.1 billion of short-term borrowings at December 31, 2017, and December 31, 2016, respectively.

Trust Preferred Securities

At December 31, 2017, 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 2017, there were no trigger events that resulted in the repayment of debt at an accelerated rate or impacted the usage of our credit facilities.

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, 2017, Ally Bank had exclusive access to $2.7 billion of funding capacity from committed credit facilities. Funding programs supported by the FRB and the FHLB 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, 2017, all of our $11.9 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, 2017, we had $2.6 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)	2017		2016		2017		2016		2017		2016
Bank funding
Secured (b)	$	1,785	$	3,250	$	890	$	350	$	2,675	$	3,600
Parent funding
Secured	6,330		11,550		2,920		1,975		9,250		13,525
Unsecured	—		—		—		1,250		—		1,250
Total committed facilities	$	8,115	$	14,800	$	3,810	$	3,575	$	11,925	$	18,375


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


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