Huntington Bancshares Incorporated Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

LONG-TERM DEBT

LONG-TERM DEBT

12 Months Ended

Dec. 31, 2016

Huntington’s long-term debt consisted of the following:



	At December 31,
(dollar amounts in thousands)	2016		2015
The Parent Company:
Senior Notes:
3.19% Huntington Bancshares Incorporated medium-term notes due 2021	$	972,625	$	—
2.33% Huntington Bancshares Incorporated senior note due 2022	953,674		—
2.64% Huntington Bancshares Incorporated senior note due 2018	399,278		399,169
Subordinated Notes:
7.00% Huntington Bancshares Incorporated subordinated notes due 2020	319,857		326,379
3.55% Huntington Bancshares Incorporated subordinated notes due 2023	248,156		—
Sky Financial Capital Trust IV 2.40% junior subordinated debentures due 2036 (1)	74,320		74,320
Sky Financial Capital Trust III 2.40% junior subordinated debentures due 2036 (1)	72,165		72,165
Huntington Capital I Trust Preferred 1.70% junior subordinated debentures due 2027 (2)	68,720		110,706
Huntington Capital II Trust Preferred 1.06% junior subordinated debentures due 2028 (3)	31,576		54,030
Camco Statutory Trust I 2.30% due 2037 (4)	4,244		4,212
Total notes issued by the parent	3,144,615		1,040,981
The Bank:
Senior Notes:
2.24% Huntington National Bank senior notes due 2018	843,568		841,313
2.10% Huntington National Bank senior notes due 2018	747,170		745,894
1.75% Huntington National Bank senior notes due 2018	499,732		501,006
1.43% Huntington National Bank senior note due 2019	499,686		498,678
2.23% Huntington National Bank senior note due 2017	499,445		500,416
2.43% Huntington National Bank senior notes due 2020	498,448		498,185
2.97% Huntington National Bank senior notes due 2020	495,088		495,998
1.42% Huntington National Bank senior notes due 2017 (5)	250,000		250,000
5.04% Huntington National Bank medium-term notes due 2018	36,351		37,469
1.31% Huntington National Bank senior note due 2016	—		498,360
1.40% Huntington National Bank senior note due 2016	—		349,399
Subordinated Notes:
3.86% Huntington National Bank subordinated notes due 2026	239,293		—
6.67% Huntington National Bank subordinated notes due 2018	131,910		136,227
5.45% Huntington National Bank subordinated notes due 2019	81,155		83,833
5.59% Huntington National Bank subordinated notes due 2016	—		103,357
Total notes issued by the bank	4,821,846		5,540,135
FHLB Advances:
3.47% weighted average rate, varying maturities greater than one year	7,540		7,800
Other:
Huntington Technology Finance nonrecourse debt, 3.43% effective interest rate, varying maturities	277,523		301,577
Huntington Technology Finance ABS Trust 2014 1.70% due 2020	57,494		123,577
Huntington Technology Finance ABS Trust 2012 1.79% due 2017	—		27,153
Other	141		141
Total other	335,158		452,448

Total long-term debt	$	8,309,159	$	7,041,364


(1)	Variable effective rate at December 31, 2016, based on three-month LIBOR +1.400%


(2)	Variable effective rate at December 31, 2016, based on three-month LIBOR +0.70%


(3)	Variable effective rate at December 31, 2016, based on three-month LIBOR +0.625%


(4)	Variable effective rate at December 31, 2016, based on three-month LIBOR +1.33%.


(5)	Variable effective rate at December 31, 2016, based on three-month LIBOR +0.425%.

Amounts above are net of unamortized discounts and adjustments related to hedging with derivative financial instruments. The derivative instruments, principally interest rate swaps, are used to hedge the fair values of certain fixed-rate debt by converting the debt to a variable rate. See Note 18 for more information regarding such financial instruments.

In August 2016, Parent Company and Bank subordinated debt with a fair value totaling $520 million was acquired by Huntington as part of the FirstMerit acquisition. See Note 3 Acquisition of FirstMerit Corporation for additional information on the method used to determine fair value.

In August 2016, Huntington issued $1.0 billion of senior notes at 99.849% of face value. The senior notes mature on January 14, 2022 and have a fixed coupon rate of 2.3%. At December 31, 2016, debt issuance costs of $5 million related to the note are reported on the balance sheet as a direct deduction from the face amount of the note.

In March 2016, Huntington issued $1.0 billion of senior notes at 99.803% of face value. The senior notes mature on March 14, 2021 and have a fixed coupon rate of 3.15%. At December 31, 2016, debt issuance costs of $5 million related to the note are reported on the balance sheet as a direct deduction from the face amount of the note.

In November 2015, the Bank issued $850 million of senior notes at 99.88% of face value. The senior bank note issuances mature on November 6, 2018 and have a fixed coupon rate of 2.20%. The senior notes may be redeemed one month prior to maturity date at 100% of principal plus accrued and unpaid interest.

In August 2015, the Bank issued $500 million of senior notes at 99.58% of face value. The senior bank note issuances mature on August 20, 2020 and have a fixed coupon rate of 2.88%.

In June 2015, the Bank issued $750 million of senior notes at 99.71% of face value. The senior bank note issuances mature on June 30, 2018 and have a fixed coupon rate of 2.00%.

On March 31, 2015, Huntington completed its acquisition of Huntington Technology Finance. As part of the acquisition, Huntington assumed $293 million of non-recourse debt with various financial institutions and maturity dates. The effective interest rate on the non-recourse debt is 3.20%. Huntington also assumed $255 million of debt associated with two securitizations. The securitization debt has various classes and associated maturity dates and has an effective interest rate of 1.70%.

In February 2015, the Bank issued $500 million of senior notes at 99.86% of face value. The senior bank note issuances mature on February 26, 2018 and have a fixed coupon rate of 1.70%. Also, in February 2015, the Bank issued $500 million of senior notes at 99.87% of face value. The senior bank note issuances mature on April 1, 2020 and have a fixed coupon rate of 2.40%. Both senior note issuances may be redeemed one month prior to the maturity date at 100% of principal plus accrued and unpaid interest.

Long-term debt maturities for the next five years and thereafter are as follows:



(dollar amounts in thousands)	2017		2018		2019		2020		2021		Thereafter		Total
The Parent Company:
Senior notes	$	—	$	400,000	$	—	$	—	$	1,000,000	$	1,000,000	$	2,400,000
Subordinated notes	—		—		—		300,000		—		503,463		803,463
The Bank:
Senior notes	750,000		2,135,000		500,000		1,000,000		—		—		4,385,000
Subordinated notes	—		125,539		75,716		—		—		250,000		451,255
FHLB Advances	100		1,115		325		2,368		—		3,769		7,677
Other	64,288		84,357		62,048		81,551		42,187		726		335,157
Total	$	814,388	$	2,746,011	$	638,089	$	1,383,919	$	1,042,187	$	1,757,958	$	8,382,552

These maturities are based upon the par values of the long-term debt.

The terms of the long-term debt obligations contain various restrictive covenants including limitations on the acquisition of additional debt in excess of specified levels, dividend payments, and the disposition of subsidiaries. As of December 31, 2016, Huntington was in compliance with all such covenants.