Long-Term Debt



(Dollars in millions)	2012		2011
Statutory business trusts:
Floating-rate subordinated notes due to State Street Capital Trust IV in 2037	$	800	$	800
Floating-rate subordinated notes due to State Street Capital Trust I in 2028	155		155
Parent company and non-banking subsidiary issuances:
2.15% notes due 2012	—		1,500
2.875% notes due 2016⁽¹⁾	1,014		999
4.375% notes due 2021⁽¹⁾	780		757
Long-term capital leases	706		694
4.956% junior subordinated debentures due 2018⁽¹⁾	550		542
4.30% notes due 2014	507		512
5.375% notes due 2017	450		450
Floating-rate notes due 2012	—		250
Floating-rate notes due 2014	250		250
7.35% notes due 2026	150		150
State Street Bank issuances:
Floating-rate extendible notes due 2014	1,000		—
5.25% subordinated notes due 2018⁽¹⁾	453		453
5.30% subordinated notes due 2016	414		419
Floating-rate subordinated notes due 2015	200		200
Total long-term debt	$	7,429	$	8,131

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We have entered into interest-rate swap agreements, recorded as fair value hedges, to modify our interest expense on these senior and subordinated notes from a fixed rate to a floating rate. As of December 31, 2012 and 2011, we recorded an increase of $174 million and $140 million, respectively, in the carrying value of long-term debt associated with fair value hedges. Refer to note 16 for additional information about derivatives.

We maintain an effective universal shelf registration that allows for the offering and sale of debt securities, capital securities, common stock, depositary shares and preferred stock, and warrants to purchase such securities, including any shares into which the preferred stock and depositary shares may be convertible, or any combination thereof.

As of December 31, 2012, State Street Bank had Board authority to issue unsecured senior debt securities from time to time, provided that the aggregate principal amount of such unsecured senior debt outstanding at any one time does not exceed $5 billion. As of December 31, 2012, $4 billion was available for issuance pursuant to this authority. As of December 31, 2012, State Street Bank had Board authority to issue up to $1.5 billion of subordinated debt, incremental to subordinated debt outstanding as of the same date. As of December 31, 2012, all $1.5 billion was available for issuance pursuant to this authority.

Statutory Business Trusts:

As of December 31, 2012, we had 2 statutory business trusts, State Street Capital Trusts I and IV, which as of December 31, 2012, collectively had issued $955 billion of trust preferred capital securities. Proceeds received by each of the trusts from their capitalization and from their capital securities issuances are invested in junior subordinated debentures issued by the parent company. The junior subordinated debentures are the sole assets of Capital Trusts I and IV. Each of the trusts is wholly-owned by us; however, in conformity with GAAP, we do not record the trusts in our consolidated financial statements.

Payments made by the trusts to holders of the capital securities are dependent on our payments made to the trusts on the junior subordinated debentures. Our fulfillment of these commitments has the effect of providing a full, irrevocable and unconditional guarantee of the trusts’ obligations under the capital securities. While the capital securities issued by the trusts are not recorded in our consolidated statement of condition, the junior subordinated debentures qualify for inclusion in tier 1 regulatory capital under federal regulatory capital guidelines. Information about restrictions on our ability to obtain funds from our subsidiary banks is provided in note 15.

Interest paid on the debentures by the parent company is recorded in interest expense. Distributions to holders of the capital securities by the trusts are payable from interest payments received on the debentures and are due quarterly by State Street Capital Trusts I and IV, subject to deferral for up to five years under certain conditions. The capital securities are subject to mandatory redemption in whole at the stated maturity upon repayment of the debentures, with an option by us to redeem the debentures at any time. Redemptions are subject to federal regulatory approval.

Parent Company and Non-Banking Subsidiary Issuances:

Interest on the 2.875% notes and the 4.375% notes is payable semi-annually in arrears on March 7 and September 7 of each year.

As of December 31, 2012 and 2011, long-term capital leases included $387 million and $410 million, respectively, related to our One Lincoln Street headquarters building and the One Lincoln Street parking garage; $269 million and $265 million, respectively, related to an office building in the U.K.; and $50 million and $18 million, respectively, related to obligations associated with construction of a new building and premises and equipment. Refer to note 19 for additional information.

Interest on the 4.956% junior subordinated debentures is payable semi-annually in arrears on March 15 and September 15 of each year. The debentures mature on March 15, 2018, and we do not have the right to redeem the debentures prior to maturity other than upon the occurrence of specified events. Redemption of the debentures is subject to federal regulatory approval. The junior subordinated debentures qualify for inclusion in tier 2 regulatory capital under federal regulatory capital guidelines.

The 4.30% notes mature on May 30, 2014, with interest payable semi-annually in arrears on May 30 and November 30 of each year. We cannot redeem the notes prior to maturity. We completed the issuance primarily in connection with our intention to redeem the U.S. Treasury's preferred equity investment received in October 2008 under the TARP Capital Purchase Program.

The 5.375% notes mature on April 30, 2017, with interest payable semi-annually in arrears on April 30 and October 30 of each year. The floating-rate notes mature on March 7, 2014, with interest payable quarterly in arrears on March 7, June 7, September 7, and December 7 of each year. The 7.35% notes mature on June 15, 2026, with interest payable semi-annually in arrears on June 15 and December 15 of each year. We may not redeem the notes prior to their maturity.

State Street Bank Issuances:

In December 2012, State Street Bank issued $1 billion of 13-month extendible senior unsecured floating-rate notes. Each of the notes had an initial maturity date of January 13, 2014; on the 18th day of each month, commencing January 18, 2013, holders are entitled to extend the maturity date of their notes for successive one-month periods in accordance with defined procedures. Pursuant to these procedures, the maturity of all of these notes has been extended to March 18, 2014. In no event may the maturity of any note be extended beyond January 15, 2016, the final maturity date. Commencing January 15, 2015, State Street Bank may redeem some or all of the notes at 100% of the principal amount of the notes to be redeemed, plus accrued interest to the redemption date. State Street Bank will pay interest on the notes on March 18, June 18, September 18 and December 18 of each year beginning on March 18, 2013, at a rate determined for each interest period equal to three-month LIBOR plus the applicable margin for that interest period.

With respect to the 5.25% subordinated bank notes due 2018, State Street Bank is required to make semi-annual interest payments on the outstanding principal balance of the notes on April 15 and October 15 of each year, and the notes qualify for inclusion in tier 2 regulatory capital under federal regulatory capital guidelines. With respect to the 5.30% subordinated notes due 2016 and the floating-rate subordinated notes due 2015, State Street Bank is required to make semi-annual interest payments on the outstanding principal balance of the 5.30% notes on January 15 and July 15 of each year, and quarterly interest payments on the outstanding principal balance of the floating-rate notes on March 8, June 8, September 8 and December 8 of each year. Each of the subordinated notes qualifies for inclusion in tier 2 regulatory capital under federal regulatory capital guidelines.