Long-Term Debt



As of December 31,	2015		2014
(In millions)
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:
3.55% notes due 2025 ⁽¹⁾	1,307		—
2.55% notes due 2020⁽¹⁾	1,199		—
3.70% notes due in 2023⁽¹⁾	1,050		1,043
3.30% notes due 2024⁽¹⁾	1,013		999
2.875% notes due 2016	1,001		1,005
3.10% subordinated notes due 2023⁽¹⁾	997		983
4.375% notes due 2021⁽¹⁾	740		730
4.956% junior subordinated debentures due 2018⁽¹⁾	519		528
Floating-rate notes due 2020	500		—
1.35% notes due 2018⁽¹⁾	496		492
5.375% notes due 2017⁽¹⁾	449		450
Long-term capital leases	334		769
7.35% notes due 2026	150		150
State Street Bank issuances:
Floating-rate extendible notes due 2016	—		900
5.25% subordinated notes due 2018	424		433
5.30% subordinated notes due 2016	400		405
Floating-rate subordinated notes due 2015	—		200
Total long-term debt	$	11,534	$	10,042

⁽¹⁾

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, 2015, the carrying value of long-term debt associated with these fair value hedges increased $105 million. As of December 31, 2014, the carrying value of long-term debt associated with these fair value hedges increased $76 million. Refer to Note 10 for additional information about fair value hedges.

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, 2015, 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, 2015, $5 billion was available for issuance pursuant to this authority. As of December 31, 2015, State Street Bank also had Board authority to issue an additional $500 million of subordinated debt.

In February 2015 State Street Bank called all $900 million of floating-rate extendible notes.

Statutory Business Trusts:

As of December 31, 2015, we had two statutory business trusts, State Street Capital Trusts I and IV, which as of December 31, 2015 had collectively issued $955 million 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 U.S. 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, a portion of the junior subordinated debentures qualify for inclusion in tier 1 regulatory capital with the remainder qualifying for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines. Information about restrictions on our ability to obtain funds from our subsidiary banks is provided in Note 16.

Interest paid by the parent company on the debentures 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. Such optional redemption is subject to federal regulatory approval.

Parent Company and Non-Banking Subsidiary Issuances:

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

In August 2015, we issued $1.2 billion of 2.55% senior notes due August 18, 2020, $1.3 billion of 3.55% senior notes due August 18, 2025 and $500 million of floating-rate notes due August 18, 2020. Interest on the 2.55% and 3.55% senior notes is payable semi-annually in arrears on February 18 and August 18 of each year beginning February 18, 2016. Interest on the floating-rate notes is payable quarterly in arrears on February 18, May 18, August 18 and November 18 of each year beginning November 18, 2015.

Interest on the 3.30% senior notes is payable semi-annually in arrears on June 16 and December 16 of each year.

Interest on the 3.70% senior notes is payable semi-annually in arrears on May 20 and November 20 of each year.

Interest on the 3.10% subordinated notes is payable semi-annually in arrears on May 15 and November 15 of each year. The 3.10% subordinated notes qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.

As of December 31, 2015 and 2014, long-term capital leases included $308 million and $336 million, respectively, related to our One Lincoln Street headquarters building and related underground parking garage. Long-term capital leases as of December 31 2014 also included $241 million, related to an office building in the U.K.; and $191 million, related to obligations associated with the completed construction of the Channel Center, a build-to-suit office building located in Boston, and other premises and equipment. During 2015, we entered into amended lease agreements for our Channel Center property located in Boston, MA and our Churchill Place property located in the U.K. As a result of such amendments, these properties no longer qualify as capital leases and are classified and accounted for as operating leases. Refer to Note 20 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. Such redemption is subject to federal regulatory approval. The junior subordinated debentures qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.

Interest on the 1.35% senior notes is payable semi-annually in arrears on May 15 and November 15 of each year.

Interest on the 5.375% senior notes is payable semi-annually in arrears on April 30 and October 30 of each year.

Interest on the 7.35% senior notes is 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:

State Street Bank is required to make semi-annual interest payments on the outstanding principal balance of the 5.25% subordinated bank notes on April 15 and October 15 of each year, and the notes qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.

State Street Bank is required to make semi-annual interest payments on the outstanding principal balance of the 5.30% subordinated notes on January 15 and July 15 of each year, and the subordinated notes qualify for inclusion in tier 2 regulatory capital under current federal regulatory capital guidelines.