Short-Term Borrowings and Long-Term Debt

The following table represents outstanding short-term borrowings and long-term debt at December 31, 2017 and 2016:



				Carrying Value
(Dollars in thousands)	Maturity	Principal value at December 31, 2017		December 31, 2017		December 31, 2016
Short-term borrowings:
Short-term FHLB advances	January 2, 2018	$	700,000	$	700,000	$	500,000
Federal funds purchased	January 2, 2018	330,000		330,000		—
Other short-term borrowings	(1)	3,730		3,730		12,668
Total short-term borrowings				$	1,033,730	$	512,668
Long-term debt:
3.50% Senior Notes	January 29, 2025	$	350,000	$	347,303	$	346,979
5.375% Senior Notes	September 15, 2020	350,000		348,189		347,586
6.05% Subordinated Notes	(2)	—		—		46,646
7.0% Junior Subordinated Debentures	(3)	—		—		54,493
Total long-term debt				$	695,492	$	795,704


(1)	Represents cash collateral received from certain counterparties in relation to market value exposures of derivative contracts in our favor.


(2)	Our 6.05% Subordinated Notes were repaid on June 1, 2017 and the interest rate swap agreement related to this issuance was terminated upon repayment of the 6.05% Subordinated Notes. At December 31, 2016, included in the carrying value of our 6.05% Subordinated Notes were $0.8 million related to hedge accounting associated with the notes.


(3)	On December 21, 2017, we redeemed in full the outstanding aggregate principal amount of $51.5 million of our 7.0% Junior Subordinated Debentures due October 15, 2033, relating to our 7.0% Cumulative Trust Preferred Securities issued by SVB Capital II.

The aggregate annual maturities of long-term debt obligations as of December 31, 2017 are as follows:



Year ended December 31, (Dollars in thousands):	Amount
2018	$	—
2019	—
2020	348,189
2021	—
2022	—
2023 and thereafter	347,303
Total	$	695,492

Interest expense related to short-term borrowings and long-term debt was $36.1 million, $37.3 million and $34.9 million in 2017, 2016 and 2015, 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 was 1.39 percent as of December 31, 2017 and 0.59 percent as of December 31, 2016.

3.50% Senior Notes

In January 2015, SVB Financial issued $350 million of 3.50% Senior Notes due in January 2025. We received net proceeds of approximately $346.4 million after deducting underwriting discounts and commissions and issuance costs. The balance of our 3.50% Senior Notes at December 31, 2017 was $347.3 million, which is reflective of $3.0 million of debt issuance costs and a $0.3 million discount.

5.375% Senior Notes

In September 2010, SVB Financial issued $350 million of 5.375% Senior Notes due in September 2020. 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

In May 2007, the Bank issued 6.05% Subordinated Notes, due in June 2017, in an aggregate principal amount of $250 million ("6.05% Subordinated Notes"). Concurrent with the issuance of the 6.05% Subordinated Notes, we entered into a fixed-to-variable interest rate swap agreement. See Note 13—“Derivative Financial Instruments” of the “Notes to the Consolidated Financial Statements” under Part II, Item 8 of this report for additional details. Our 6.05% Subordinated Notes, issued by the Bank, were repaid on June 1, 2017. The interest rate swap agreement relating to this issuance was terminated upon repayment of the notes.

7.0% Junior Subordinated Debentures

In October 2003, SVB Financial 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% per annum of the face value of the junior subordinated debentures. Distributions for 2017 were $3.3 million and $3.5 million for each of years 2016 and 2015. The junior subordinated debentures were mandatorily redeemable upon maturity in October 2033, or could be redeemed prior to maturity in whole or in part, at our option, at any time. Issuance costs of $2.2 million related to the junior subordinated debentures were deferred and were being amortized over the period until redemption. On December 21, 2017, we redeemed in full the outstanding aggregate principal amount of $51.5 million of our 7.0% Junior Subordinated Debentures due October 15, 2033, relating to our 7.0% Cumulative Trust Preferred Securities issued by SVB Capital II and the remaining deferred issuance costs were recognized upon redemption.

Available Lines of Credit

We have certain facilities in place to enable us to access short-term borrowings on a secured (using loans and 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, 2017, we borrowed $330 million against our uncommitted federal funds lines. We also pledge securities to the FHLB of San Francisco and the discount window at the FRB. The fair value of collateral pledged to the FHLB of San Francisco (comprised primarily of loans and U.S. Treasury securities) at December 31, 2017 totaled $3.4 billion, of which $2.7 billion was available to support additional borrowings. The fair value of collateral pledged at the discount window of the FRB (comprised primarily of U.S. Treasury securities and U.S. agency debentures) at December 31, 2017 totaled $1.0 billion, all of which was unused and available to support additional borrowings.