Long-Term Debt

The composition of long-term debt is presented in the following table. Interest rates on floating rate notes are determined periodically by formulas based on certain money market rates or, in certain instances, by minimum interest rates as specified in the agreements governing the issues. Interest rates in effect at December 31, 2013 are shown in parentheses.



At December 31,	2013		2012
	(in millions)
Issued by HSBC USA:
Non-subordinated debt:
Medium-Term Floating Rate Notes due 2013-2043 (.00% – 2.55%)	$	5,424	$	4,730
Floating Rate Debt due 2013-2017 (.89% – 1.59%)	4,000		4,000
2.375% Senior Notes due 2015	2,258		2,257
5 year Senior Notes due 2018 (1.26% - 2.625%)	2,488		1,500
Total non-subordinated debt	14,170		12,487
Subordinated debt:
Fixed Rate Subordinated Notes due 2014-2097 (5.00% – 9.50%)	1,319		1,320
Junior Subordinated Debentures due 2026-2027 (7.75% – 8.38%)	560		559
Total subordinated debt	1,879		1,879
Total issued by HSBC USA	16,049		14,366

Issued or acquired by HSBC Bank USA and its subsidiaries:
Non-subordinated debt:
Global Bank Note Program:
Medium-Term Notes due 2013-2040 (.00% – 2.31%)	294		658
Total Global Bank Note Program:	294		658
Federal Home Loan Bank of New York advances:
Floating Rate FHLB advance due 2036 (.30%)	1,000		1,000
Total Federal Home Loan Bank of New York advances:	1,000		1,000
Precious metal leases due 2013 - 2014 (1.02%)	39		54
Secured financings with Structured Note Vehicles⁽¹⁾	—		63
Other	12		12
Total non-subordinated debt	1,345		1,787
Subordinated debt:
4.625% Global Subordinated Notes due 2014	1,000		999
Other	92		92
Global Bank Note Program:
Fixed Rate Global Bank Notes due 2017-2039 (4.875% – 7.00%)	4,361		4,498
Total subordinated debt	5,453		5,589
Total issued or acquired by HSBC Bank USA and its subsidiaries	6,798		7,376
Obligations under capital leases	—		3
Total long-term debt	$	22,847	$	21,745


⁽¹⁾	See Note 25, "Variable Interest Entities," for additional information.

The table above excludes $900 million of long-term debt at December 31, 2013 and 2012, due to us from HSBC Bank USA. Of this amount, the earliest note is due to mature in 2022 and the latest note is due to mature in 2097.

Foreign currency denominated long-term debt was immaterial at December 31, 2013 and 2012.

At December 31, 2013 and 2012, we have elected fair value option accounting for some of our medium-term floating rate notes and certain subordinated debt. See Note 16, "Fair Value Option," for further details. At December 31, 2013 and 2012, medium term notes totaling $5.7 billion and $5.3 billion, respectively, were carried at fair value. Subordinated debt of $1.9 billion and $2.0 billion was carried at fair value at December 31, 2013 and 2012.

The Junior Subordinated Debentures due 2026-2027 were issued to and held by three capital funding trusts organized by us. The trusts issued preferred stock collateralized by the debentures which are guaranteed by us. The trusts also issued common stock, all of which is held by us and recorded in other assets. The debentures issued to the capital funding trusts, less the amount of their common stock we hold, qualified as Tier 1 capital at December 31, 2013. Although the capital funding trusts are VIEs, our investment in the common stock does not expose us to risk as it does not require funding from us and therefore, is not considered to be equity at risk. Under Basel III capital requirements, these securities are required to be phased out of Tier 1 capital by January 1, 2016, with 50 percent of these capital securities includable in 2014 and 25 percent includable in 2015. The trust preferred securities excluded from Tier 1 Capital may be included fully in Tier 2 Capital during those two years, but must be phased out of Tier 2 Capital by January 1, 2022. As we hold no other interests in the capital funding trusts and therefore are not their primary beneficiary, we do not consolidate them. In December 2012, we exercised our option to call $309 million of debentures previously issued by HUSI to HSBC USA Capital Trust VII (the "Trust") at the contractual call price of 103.925 percent which resulted in a net loss on extinguishment of approximately $12 million. The Trust used the proceeds to redeem the trust preferred securities previously issued to an affiliate. We subsequently issued one share of common stock to our parent, HNAI for a capital contribution of $312 million.

Maturities of long-term debt at December 31, 2013, including secured financings, were as follows:



	(in millions)
2014	$	3,926
2015	4,333
2016	1,462
2017	1,859
2018	3,066
Thereafter	8,201
Total	$	22,847