Short-Term Borrowings and Long-Term Debt

The following table represents outstanding short-term borrowings and long-term debt at December 31, 2013 and 2012:



				Carrying Value
(Dollars in thousands)	Maturity	Principal value at December 31, 2013		December 31, 2013		December 31, 2012
Short-term borrowings:
Federal funds purchased	—	—		—		160,000
Other short-term borrowings	(1)	5,080		5,080		6,110
Total short-term borrowings				$	5,080	$	166,110
Long-term debt:
5.375% Senior Notes	September 15, 2020	$	350,000	$	348,209	$	347,995
6.05% Subordinated Notes (2)	June 1, 2017	45,964		51,987		54,571
7.0% Junior Subordinated Debentures	October 15, 2033	50,000		55,020		55,196
Total long-term debt				$	455,216	$	457,762


(1)	Represents cash collateral received from our counterparty for our interest rate swap agreement related to our 6.05% Subordinated Notes.


(2)	At December 31, 2013 and 2012, included in the carrying value of our 6.05% Subordinated Notes were $6 million and $9 million, respectively, related to hedge accounting associated with the notes.

The aggregate annual maturities of long-term debt obligations as of December 31, 2013 are as follows:



Year ended December 31, (dollars in thousands):	Amount
2014	$	—
2015	—
2016	—
2017	51,987
2018	—
2019 and thereafter	403,229
Total	$	455,216

Interest expense related to short-term borrowings and long-term debt was $23.1 million, $24.2 million and $30.2 million in 2013, 2012 and 2011, respectively. Interest expense is net of the hedge accounting impact from our interest rate swap agreements related to our 6.05% Subordinated Notes. The weighted average interest rate associated with our short-term borrowings as of December 31, 2013 was 0.08 percent.

5.375% Senior Notes

In September 2010, we issued $350 million of 5.375% Senior Notes due in September 2020 (“5.375% Senior Notes”). We received net proceeds of $345 million after deducting underwriting discounts and commissions and other expenses. We used approximately $250 million of the net proceeds from the sale of the notes to meet obligations due on our 3.875% Convertible Notes, which matured in April 2011. The remaining net proceeds were used for general corporate purposes, including working capital.

6.05% Subordinated Notes

On May 15, 2007, the Bank issued 6.05% Subordinated Notes, due in June 2017, in an aggregate principal amount of $250 million. Concurrent with the issuance of the 6.05% Subordinated Notes, we entered into a fixed-to-variable interest rate swap agreement (see Note 12-“Derivative Financial Instruments”).

We repurchased $204 million of our 6.05% Subordinated Notes through a tender offer transaction in May 2011. The repurchase resulted in a gross loss from extinguishment of debt. In connection with the repurchase, we terminated the corresponding amount of the interest rate swap associated with the 6.05% Subordinated Notes (see Note 12-“Derivative Financial Instruments”), resulting in a gross gain on swap termination. The net gain from the note repurchase and the termination of the corresponding portion of the interest rate swap was recognized during the second quarter of 2011 as a reduction in noninterest expense, which is included in the line item “Other”.

7.0% Junior Subordinated Debentures

In October 2003, we issued $50 million in 7.0% Junior Subordinated Debentures to a special-purpose trust, SVB Capital II. Distributions to SVB Capital II are cumulative and are payable quarterly at a fixed rate of 7.0 percent per annum of the face value of the junior subordinated debentures. Distributions for each of 2013, 2012 and 2011 were $3.5 million. The junior subordinated debentures are mandatorily redeemable upon maturity in October 2033, or may be redeemed prior to maturity in whole or in part, at our option, at any time on or after October 2008. Issuance costs of $2.2 million related to the junior subordinated debentures were deferred and are being amortized over the period until mandatory redemption of the debentures in October 2033.

Available Lines of Credit

We have certain facilities in place to enable us to access short-term borrowings on a secured (using available-for-sale securities as collateral) and an unsecured basis. These include repurchase agreements and uncommitted federal funds lines with various financial institutions. As of December 31, 2013, we did not borrow against our uncommitted federal funds lines. We also pledge securities to the FHLB of San Francisco and the discount window at the FRB. The market value of collateral pledged to the FHLB of San Francisco (comprised primarily of U.S. agency debentures) at December 31, 2013 totaled $1.4 billion, all of which was unused and available to support additional borrowings. The market value of collateral pledged at the discount window of the FRB at December 31, 2013 totaled $578 million, all of which was unused and available to support additional borrowings.