Debt

Short-term Borrowings

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



	September 30, 2018						December 31, 2017
($ in millions)	Unsecured		Secured (a)		Total		Unsecured		Secured (a)		Total
Demand notes	$	2,575	$	—	$	2,575	$	3,171	$	—	$	3,171
Federal Home Loan Bank	—		3,525		3,525		—		7,350		7,350
Financial instruments sold under agreements to repurchase	—		1,238		1,238		—		892		892
Total short-term borrowings	$	2,575	$	4,763	$	7,338	$	3,171	$	8,242	$	11,413


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

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 September 30, 2018, the financial instruments sold under agreements to repurchase consisted of $812 million of U.S. Treasury and $426 million of agency mortgage-backed residential debt securities set to mature as follows: $1.1 billion within 30 days, and $142 million within 61 to 90 days. Refer to Note 6 and Note 20 for further details.

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 September 30, 2018, we placed cash collateral totaling $15 million and received no cash collateral. At December 31, 2017, we placed cash collateral totaling $10 million and received cash collateral totaling $1 million.

Long-term Debt

The following table presents the composition of our long-term debt portfolio.



	September 30, 2018							December 31, 2017
($ in millions)	Unsecured		Secured			Total		Unsecured		Secured			Total
Long-term debt
Due within one year	$	2,043	$	7,619		$	9,662	$	3,482	$	7,499		$	10,981
Due after one year (a)	11,135		24,683			35,818		11,909		21,128			33,037
Fair value adjustment (b)	135		(73		)	62		240		(32		)	208
Total long-term debt (c)	$	13,313	$	32,229		$	45,542	$	15,631	$	28,595		$	44,226


(a)	Includes $2.6 billion of trust preferred securities at both September 30, 2018, and December 31, 2017.


(b)	Represents the basis adjustment associated with the application of hedge accounting on certain of our long-term debt positions. Refer to Note 17 for additional information.


(c)	Includes advances from the FHLB of Pittsburgh of $14.0 billion and $10.3 billion at September 30, 2018, and December 31, 2017, respectively.

The following table presents the scheduled remaining maturity of long-term debt at September 30, 2018, 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	$	1,245		$	1,681		$	2,251		$	679		$	1,066		$	7,417		$	135		$	14,474
Original issue discount	(26		)	(38		)	(39		)	(43		)	(47		)	(968		)	—			(1,161		)
Total unsecured	1,219			1,643			2,212			636			1,019			6,449			135			13,313
Secured
Long-term debt	1,556			7,670			7,784			8,977			4,659			1,656			(73		)	32,229
Total long-term debt	$	2,775		$	9,313		$	9,996		$	9,613		$	5,678		$	8,105		$	62		$	45,542

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.



	September 30, 2018					December 31, 2017
($ in millions)	Total (a)			Ally Bank		Total (a)			Ally Bank
Investment securities (b)	$	6,335		$	5,487	$	8,371		$	7,443
Mortgage assets held-for-investment and lending receivables	16,299			16,299		13,579			13,579
Consumer automotive finance receivables	17,813			10,333		19,787			6,200
Commercial automotive finance receivables	14,371			14,337		16,567			16,472
Operating leases	213			—		457			—
Total assets restricted as collateral (c) (d)	$	55,031		$	46,456	$	58,761		$	43,694
Secured debt	$	36,992	(e)	$	29,118	$	36,837	(e)	$	23,278


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


(b)	A portion of the restricted investment securities at September 30, 2018, and December 31, 2017, 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 $25.9 billion and $25.2 billion at September 30, 2018, and December 31, 2017, 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 $2.4 billion and $2.3 billion at September 30, 2018, and December 31, 2017, respectively. These assets were composed of consumer automotive finance receivables and loans. 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 Condensed Consolidated Balance Sheet. Refer to Note 10 for additional information.


(e)	Includes $4.8 billion and $8.2 billion of short-term borrowings at September 30, 2018, and December 31, 2017, respectively.

Trust Preferred Securities

At September 30, 2018, 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 are payable at an annual rate equal to three-month London interbank offer rate plus 5.785% payable quarterly in arrears. 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 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.

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 Condensed Consolidated Balance Sheet.

As of September 30, 2018, Ally Bank had exclusive access to $3.5 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 September 30, 2018, all of our $9.2 billion of committed capacity was revolving. Our revolving facilities generally have an original tenor ranging from 364 days to two years. As of September 30, 2018, we had $5.0 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
($ in millions)	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Bank funding
Secured	$	3,500	$	1,785	$	—	$	890	$	3,500	$	2,675
Parent funding
Secured	3,345		6,330		2,380		2,920		5,725		9,250
Total committed facilities	$	6,845	$	8,115	$	2,380	$	3,810	$	9,225	$	11,925


(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.