Note 16.

Long-Term Borrowings

The table below presents details about the firm’s long-term borrowings.


	As of
$ in millions		March 2017	December 2016
Other secured financings (long-term)		$ 11,127	$ 8,405

Unsecured long-term borrowings		199,370	189,086
Total		$210,497	$197,491

See Note 10 for information about other secured financings.

The table below presents unsecured long-term borrowings extending through 2056, which consists principally of senior borrowings.

$ in millions

U.S.

Dollar

Non-U.S.
Dollar

Total

As of March 2017

Fixed-rate obligations

$ 97,757

$ 31,811

$129,568

Floating-rate obligations

40,672

29,130

69,802

Total

$138,429

$ 60,941

$199,370

As of December 2016

Fixed-rate obligations

$ 96,113

$ 32,159

$128,272

Floating-rate obligations

36,748

24,066

60,814

Total

$132,861

$ 56,225

$189,086

In the table above:

•

Floating interest rates are generally based on LIBOR or Overnight Index Swap Rate. Equity-linked and indexed instruments are included in floating-rate obligations.

•

Interest rates on U.S. dollar-denominated debt ranged from 1.60% to 10.04% (with a weighted average rate of 4.47%) and 1.60% to 10.04% (with a weighted average rate of 4.57%) as of March 2017 and December 2016, respectively.

•

Interest rates on non-U.S. dollar-denominated debt ranged from 0.07% to 13.00% (with a weighted average rate of 3.01%) and 0.02% to 13.00% (with a weighted average rate of 3.05%) as of March 2017 and December 2016, respectively.

The table below presents unsecured long-term borrowings by maturity date.


$ in millions			As of March 2017
2018			$ 20,246

2019			26,790

2020			21,749

2021			20,969

2022			16,723

2023 - thereafter			92,893
Total			$199,370

In the table above:

•

Unsecured long-term borrowings maturing within one year of the financial statement date and unsecured long-term borrowings that are redeemable within one year of the financial statement date at the option of the holder are excluded as they are included in “Unsecured short-term borrowings.”

•

Unsecured long-term borrowings that are repayable prior to maturity at the option of the firm are reflected at their contractual maturity dates.

•

Unsecured long-term borrowings that are redeemable prior to maturity at the option of the holder are reflected at the earliest dates such options become exercisable.

•

Unsecured long-term borrowings include $6.93 billion of adjustments to the carrying value of certain unsecured long-term borrowings resulting from the application of hedge accounting by year of maturity as follows: $190 million in 2018, $292 million in 2019, $314 million in 2020, $551 million in 2021, $(20) million in 2022, and $5.60 billion in 2023 and thereafter.

The firm designates certain derivatives as fair value hedges to convert a portion of its fixed-rate unsecured long-term borrowings not accounted for at fair value into floating-rate obligations. See Note 7 for further information about hedging activities. The table below presents unsecured long-term borrowings, after giving effect to such hedging activities.


	As of
$ in millions		March 2017	December 2016
Fixed-rate obligations:
At fair value		$ 145	$ 150

At amortized cost		75,019	74,718

Floating-rate obligations:
At fair value		31,930	29,260

At amortized cost		92,276	84,958
Total		$199,370	$189,086

In the table above, the weighted average interest rates on the aggregate amounts were 2.88% (3.90% related to fixed-rate obligations and 2.05% related to floating-rate obligations) and 2.87% (3.90% related to fixed-rate obligations and 1.97% related to floating-rate obligations) as of March 2017 and December 2016, respectively. These rates exclude financial instruments accounted for at fair value under the fair value option.

As of March 2017 and December 2016, the carrying value of unsecured long-term borrowings for which the firm did not elect the fair value option approximated fair value. As these borrowings are not accounted for at fair value under the fair value option or at fair value in accordance with other U.S. GAAP, their fair value is not included in the firm’s fair value hierarchy in Notes 6 through 8. Had these borrowings been included in the firm’s fair value hierarchy, substantially all would have been classified in level 2 as of March 2017 and December 2016.

Subordinated Borrowings

Unsecured long-term borrowings include subordinated debt and junior subordinated debt. Junior subordinated debt is junior in right of payment to other subordinated borrowings, which are junior to senior borrowings. As of both March 2017 and December 2016, subordinated debt had maturities ranging from 2018 to 2045. Subordinated debt that matures within one year of the financial statement date is included in “Unsecured short-term borrowings.”

The table below presents details about the firm’s subordinated borrowings.

$ in millions

Par
Amount

Carrying
Amount

Rate

As of March 2017

Subordinated debt

$14,827

$17,280

4.29%

Junior subordinated debt

1,360

1,807

5.72%

Total

$16,187

$19,087

4.41%

As of December 2016

Subordinated debt

$15,058

$17,604

4.29%

Junior subordinated debt

1,360

1,809

5.70%

Total

$16,418

$19,413

4.41%

In the table above, the rate is the weighted average interest rate for these borrowings, including the effect of fair value hedges used to convert these fixed-rate obligations into floating-rate obligations. See Note 7 for further information about hedging activities. The rates exclude financial instruments accounted for at fair value under the fair value option.

Junior Subordinated Debt

Junior Subordinated Debt Held by Trusts. In 2012, the Vesey Street Investment Trust I (Vesey Street Trust) and the Murray Street Investment Trust I (Murray Street Trust) issued an aggregate of $2.25 billion of senior guaranteed trust securities to third parties, the proceeds of which were used to purchase junior subordinated debt issued by Group Inc. from Goldman Sachs Capital II and Goldman Sachs Capital III (APEX Trusts). The APEX Trusts used the proceeds to purchase shares of Group Inc.’s Perpetual Non-Cumulative Preferred Stock, Series E (Series E Preferred Stock) and Perpetual Non-Cumulative Preferred Stock, Series F (Series F Preferred Stock). The senior guaranteed trust securities issued by the Vesey Street Trust and Murray Street Trust and the related junior subordinated debt matured during the third quarter of 2016 and the first quarter of 2017, respectively. As of December 2016, $1.45 billion of senior guaranteed trust securities issued by the Murray Street Trust and the related junior subordinated debt were outstanding.

The APEX Trusts are Delaware statutory trusts sponsored by the firm and wholly-owned finance subsidiaries of the firm for regulatory and legal purposes but are not consolidated for accounting purposes.

The firm has covenanted in favor of the holders of Group Inc.’s 6.345% junior subordinated debt due February 15, 2034, that, subject to certain exceptions, the firm will not redeem or purchase the capital securities issued by the APEX Trusts, shares of Group Inc.’s Series E or Series F Preferred Stock or shares of Group Inc.’s Series O Perpetual Non-Cumulative Preferred Stock if the redemption or purchase results in less than $253 million aggregate liquidation preference outstanding, prior to specified dates in 2022 for a price that exceeds a maximum amount determined by reference to the net cash proceeds that the firm has received from the sale of qualifying securities. During 2016, the firm exchanged a par amount of $1.32 billion (of which $672 million was exchanged in the first quarter of 2016) of APEX issued by the APEX Trusts for a corresponding redemption value of the Series E and Series F Preferred Stock, which was permitted under the covenants referenced above.

Junior Subordinated Debt Issued in Connection with Trust Preferred Securities. Group Inc. issued $2.84 billion of junior subordinated debt in 2004 to Goldman Sachs Capital I (Trust), a Delaware statutory trust. The Trust issued $2.75 billion of guaranteed preferred beneficial interests (Trust Preferred Securities) to third parties and $85 million of common beneficial interests to Group Inc. and used the proceeds from the issuances to purchase the junior subordinated debt from Group Inc. As of both March 2017 and December 2016, the outstanding par amount of junior subordinated debt held by the Trust was $1.36 billion and the outstanding par amount of Trust Preferred Securities and common beneficial interests issued by the Trust was $1.32 billion and $40.8 million, respectively. The Trust is a wholly-owned finance subsidiary of the firm for regulatory and legal purposes but is not consolidated for accounting purposes.

The firm pays interest semi-annually on the junior subordinated debt at an annual rate of 6.345% and the debt matures on February 15, 2034. The coupon rate and the payment dates applicable to the beneficial interests are the same as the interest rate and payment dates for the junior subordinated debt. The firm has the right, from time to time, to defer payment of interest on the junior subordinated debt, and therefore cause payment on the Trust’s preferred beneficial interests to be deferred, in each case up to ten consecutive semi-annual periods. During any such deferral period, the firm will not be permitted to, among other things, pay dividends on or make certain repurchases of its common stock. The Trust is not permitted to pay any distributions on the common beneficial interests held by Group Inc. unless all dividends payable on the preferred beneficial interests have been paid in full.