19. Long-Term Debt

The following table presents the components of our long-term debt, net of unamortized discounts and adjustments related to hedging with derivative financial instruments. We use interest rate swaps and caps, which modify the repricing characteristics of certain long-term debt, to manage interest rate risk. For more information about such financial instruments, see Note 9 (“Derivatives and Hedging Activities”).



December 31,
dollars in millions	2016		2015
Senior medium-term notes due through 2021 ^(a)	$	2,799	$	2,817
7.25% Subordinated notes due 2021 ^(b)	358		—
6.75% Senior notes due 2020 ^(b)	338		—
1.586% Subordinated notes due 2028 ^(c)	162		162
6.875% Subordinated notes due 2029 ^(c)	111		114
7.750% Subordinated notes due 2029 ^(c)	141		147
Other subordinated notes ^(d)	78		—
Total parent company	3,987		3,240
Senior medium-term notes due through 2039 ^(e)	6,715		5,242
3.18% Senior remarketable notes due 2027 ^(f)	193		183
5.45% Subordinated notes due 2016 ^(f)	—		503
5.70% Subordinated notes due 2017 ^(f)	207		215
4.625% Subordinated notes due 2018 ^(f)	102		103
3.40% Subordinated notes due 2026 ^(f)	567		—
6.95% Subordinated notes due 2028 ^(f)	299		298
Secured borrowing due through 2021 ^(g)	68		134
Federal Home Loan Bank advances due through 2036 ^(h)	126		166
Investment Fund Financing due through 2052 ⁽ⁱ⁾	100		100
Obligations under Capital Leases due through 2032 ^(j)	20		—
Total subsidiaries	8,397		6,944
Total long-term debt	$	12,384	$	10,184


(a)	Senior medium-term notes had a weighted-average interest rate of 3.57% at December 31, 2016, and 3.58% at December 31, 2015. These notes had fixed interest rates at December 31, 2016, and December 31, 2015. These notes may not be redeemed prior to their maturity dates.


(b)	These notes are all obligations of KeyCorp and may not be redeemed prior to their maturity dates.


(c)	See Note 20 (“Trust Preferred Securities Issued by Unconsolidated Subsidiaries”) for a description of these notes.


(d)	These subordinated notes represent seven trust preferred debentures acquired in the First Niagara acquisition. These notes have different interest rates ranging from 2.167% to 10.875% with maturity dates between 2030 and 2037. See Note 20 (“Trust Preferred Securities Issued by Unconsolidated Subsidiaries”) for a description of these notes.


(e)	Senior medium-term notes had weighted-average interest rates of 1.93% at December 31, 2016, and 1.99% at December 31, 2015. These notes had a combination of fixed and floating interest rates, and may not be redeemed prior to their maturity dates.


(f)	These notes are all obligations of KeyBank and may not be redeemed prior to their maturity dates.

(g)

The secured borrowing had weighted-average interest rates of 4.45% at December 31, 2016, and 4.42% at December 31, 2015. This borrowing is collateralized by commercial lease financing receivables, and principal reductions are based on the cash payments received from the related receivables. Additional information pertaining to these commercial lease financing receivables is included in Note 5 (“Loans and Loans Held for Sale”).


(h)	Long-term advances from the Federal Home Loan Bank had a weighted-average interest rate of 3.64% at December 31, 2016, and 3.58% at December 31, 2015. These advances, which had fixed interest rates, were secured by real estate loans and securities totaling $126 million at December 31, 2016, and $251 million at December 31, 2015.


(i)	Investment Fund Financing had a weighted-average interest rate of 1.94% at December 31, 2016, and December 31, 2015.


(j)	These are capital leases acquired in the First Niagara merger with a maturity range from January 2018 through October 2032.

At December 31, 2016, scheduled principal payments on long-term debt were as follows:



in millions	Parent		Subsidiaries		Total
2017	—		$	270	$	270
2018	$	750	2,120		2,870
2019	—		2,253		2,253
2020	1,332		1,012		2,344
2021	1,413		752		2,165
All subsequent years	493		1,989		2,482

As described below, KeyBank and KeyCorp have a number of programs that support our long-term financing needs.

Global bank note program. In August 2012, KeyBank adopted a Global Bank Note Program permitting the issuance of up to $20 billion of notes domestically and abroad. On September 29, 2015, KeyBank updated its Global Bank Note Program, authorizing the issuance of up to $20 billion of notes domestically and abroad, separate from the $20 billion authorized under the program in 2012. There will be no additional notes issued under the 2012 authorization. Under the program, KeyBank is authorized to issue notes with original maturities of seven days or more for senior notes or five years or more for subordinated notes. Notes may be denominated in U.S. dollars or in foreign currencies. Amounts outstanding under the program and any prior bank note programs are classified as “long-term debt” on the balance sheet.

Prior to updating its Global Bank Note Program on September 29, 2015, KeyBank issued the following notes under the Global Bank Note Program in 2015: on February 12, 2015, $1 billion of 2.250% Senior Bank Notes due March 16, 2020; and on June 1, 2015, $750 million of 1.70% Senior Bank Notes and $250 million of Floating Rate Senior Notes each due June 1, 2018, and $750 million of 3.30% Senior Bank Notes due June 1, 2025.

In 2016, KeyBank issued the following notes under the Global Bank Note Program: on March 8, 2016, $1 billion of 2.35% Senior Bank Notes due March 8, 2019; on May 20, 2016, $600 million of 3.40% Subordinated Bank Notes due May 20, 2026; on August 22, 2016, $500 million of 1.60% Senior Bank Notes due August 22, 2019; and on November 22, 2016, $250 million of Floating Rate Senior Notes and $500 million of 2.50% Senior Notes each due November 22, 2021. At December 31, 2016, $17.15 billion remained available for future issuance under the Global Bank Note Program.

KeyCorp shelf registration, including Medium-Term Note Program. KeyCorp has a shelf registration statement on file with the SEC under rules that allow companies to register various types of debt and equity securities without limitations on the aggregate amounts available for issuance. KeyCorp also maintains a Medium-Term Note Program that permits KeyCorp to issue notes with original maturities of nine months or more. On September 15, 2015, KeyCorp issued $1 billion of 2.90% Medium-Term Notes due September 15, 2020. At December 31, 2016, KeyCorp had authorized and available for issuance up to $3 billion of additional debt securities under the Medium-Term Note Program.

Issuances of capital securities or preferred stock by KeyCorp must be approved by the Board and cannot be objected to by the Federal Reserve.