Debt

Short-term Borrowings

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



	2018							2017
December 31, ($ in millions)	Unsecured		Secured (a)		Total			Unsecured		Secured (a)		Total
Demand notes	$	2,477	$	—	$	2,477		$	3,171	$	—	$	3,171
Federal Home Loan Bank	—		6,825		6,825			—		7,350		7,350
Securities sold under agreements to repurchase	—		685		685			—		892		892
Total short-term borrowings	$	2,477	$	7,510	$	9,987		$	3,171	$	8,242	$	11,413
Weighted average interest rate (b)					2.5		%					1.5		%


(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 securities 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, 2018, the securities sold under agreements to repurchase consisted of $436 million of U.S. Treasury securities and $249 million of agency mortgage-backed residential debt securities set to mature as follows: $575 million within 30 days, and $110 million within 31 to 60 days. Refer to Note 8 and Note 25 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 December 31, 2018, we did not place any collateral, and we received cash collateral totaling $8 million and noncash collateral totaling $4 million. At December 31, 2017, we placed cash collateral totaling $10 million and received cash collateral totaling $1 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
2018
Unsecured debt
Fixed rate (b)	$	9,406
Variable rate	1
Trust preferred securities (c)	2,572
Hedge basis adjustment (d)	128
Total unsecured debt	12,107			2.42–8.40%	6.29	%	2019–2049
Secured debt
Fixed rate	23,514
Variable rate (e)	8,633
Hedge basis adjustment (d)	(61		)
Total secured debt (f) (g) (h)	32,086			1.26–4.50%	2.54	%	2019–2037
Total long-term debt	$	44,193
2017
Unsecured debt
Fixed rate (b)	$	12,820
Variable rate	1
Trust preferred securities (c)	2,570
Hedge basis 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
Hedge basis 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


(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 $1.0 billion and $1.4 billion at December 31, 2018, and 2017, respectively.


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


(d)	Represents the basis adjustment associated with the application of hedge accounting on certain of our long-term debt positions. Refer to Note 21 for additional information.


(e)	Includes $5 million and $8 million at December 31, 2018, and 2017, respectively, of long-term debt that does not have a stated interest rate.


(f)	Includes $10.5 billion and $10.2 billion of VIE secured debt at December 31, 2018, and 2017, respectively.


(g)	Includes $6.7 billion and $8.1 billion of debt outstanding from our automotive committed secured credit facilities at December 31, 2018, and 2017, respectively.


(h)	Includes advances from the FHLB of Pittsburgh of $14.9 billion and $10.3 billion at December 31, 2018, and 2017, respectively.



	2018						2017
December 31, ($ in millions)	Unsecured		Secured		Total		Unsecured		Secured		Total
Long-term debt (a)
Due within one year	$	1,663	$	7,313	$	8,976	$	3,540	$	7,497	$	11,037
Due after one year	10,444		24,773		35,217		12,091		21,098		33,189
Total long-term debt	$	12,107	$	32,086	$	44,193	$	15,631	$	28,595	$	44,226


(a)	Includes basis adjustments related to the application of hedge accounting. Amounts for December 31, 2017, have been updated to conform to this change in presentation.

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 of our fixed-rate debt into variable-rate obligations, and $3.4 billion of our variable-rate debt into fixed-rate obligations at December 31, 2017. We did not have any derivative financial instruments that synthetically converted fixed-rate debt into variable-rate obligations or variable-rate debt into fixed rate obligations at December 31, 2018.

The following table presents the scheduled remaining maturity of long-term debt at December 31, 2018, assuming no early redemptions will occur. The amounts below include adjustments to the carrying value resulting from the application of hedge accounting. The actual payment of secured debt may vary based on the payment activity of the related pledged assets.



($ in millions)	2019			2020			2021			2022			2023			2024 and thereafter			Total
Unsecured
Long-term debt	$	1,704		$	2,257		$	698		$	1,069		$	12		$	7,502		$	13,242
Original issue discount	(41		)	(41		)	(45		)	(49		)	(56		)	(903		)	(1,135		)
Total unsecured	1,663			2,216			653			1,020			(44		)	6,599			12,107
Secured
Long-term debt	7,313			7,363			10,195			5,321			1,230			664			32,086
Total long-term debt	$	8,976		$	9,579		$	10,848		$	6,341		$	1,186		$	7,263		$	44,193

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.



	2018					2017
December 31, ($ in millions)	Total (a)			Ally Bank		Total (a)			Ally Bank
Investment securities (b)	$	10,280		$	9,564	$	8,371		$	7,443
Mortgage assets held-for-investment and lending receivables	16,498			16,498		13,579			13,579
Consumer automotive finance receivables	17,015			9,715		19,787			6,200
Commercial automotive finance receivables	15,563			15,563		16,567			16,472
Operating leases	170			—		457			—
Total assets restricted as collateral (c) (d)	$	59,526		$	51,340	$	58,761		$	43,694
Secured debt	$	39,596	(e)	$	32,072	$	36,837	(e)	$	23,278


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


(b)	A portion of the restricted investment securities at December 31, 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 $30.8 billion and $25.2 billion at December 31, 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 December 31, 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 Consolidated Balance Sheet. Refer to Note 13 for additional information.


(e)	Includes $7.5 billion and $8.2 billion of short-term borrowings at December 31, 2018, and December 31, 2017, respectively.

Trust Preferred Securities

At December 31, 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.

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 committed secured 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 2018, there were no trigger events that resulted in the repayment of debt at an accelerated rate or impacted the usage of our facilities.

Funding Facilities

We utilize both committed secured 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, 2018, Ally Bank had exclusive access to $4.8 billion of funding capacity from committed credit facilities. Ally Bank’s credit facilities are complemented by the FRB and FHLB funding programs.

The total capacity in our credit facilities is provided by banks through private transactions. The facilities can be revolving in nature, generally having an original tenor ranging from 364 days to two years, and allow for additional funding during the commitment period, or they can be amortizing and not allow for any further funding after the commitment period. At December 31, 2018, all of our $8.6 billion of capacity was revolving. As of December 31, 2018, we had $7.0 billion of capacity from facilities with a remaining tenor greater than 364 days.

Committed Secured Credit Facilities



	Outstanding				Unused capacity (a)				Total capacity
December 31, ($ in millions)	2018		2017		2018		2017		2018		2017
Bank funding
Secured	$	3,500	$	1,785	$	1,300	$	890	$	4,800	$	2,675
Parent funding
Secured	3,165		6,330		635		2,920		3,800		9,250
Total committed secured credit facilities	$	6,665	$	8,115	$	1,935	$	3,810	$	8,600	$	11,925


(a)	Funding from committed secured credit 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.