Long-Term Debt

The composition of long-term debt is presented in the following table. Interest rates on floating rate notes are determined periodically by formulas based on certain money market rates or, in certain instances, by minimum interest rates as specified in the agreements governing the issues. The table below reflects interest rates and maturity dates in effect at December 31, 2015.



	December 31, 2015			December 31, 2014
	(in millions)
Senior debt:
Fixed rate:
Secured financings:
5.00% to 5.99%	$	—		$	16
Other fixed rate senior debt:
2.00% to 2.99%	—			62
3.00% to 3.99%; due 2016	88			379
4.00% to 4.99%; due 2016 to 2018	71			1,855
5.00% to 5.49%; due 2016 to 2021	1,289			4,246
5.50% to 5.99%; due 2016 to 2018	2,002			2,083
6.00% to 6.49%; due 2016 to 2017	1,369			1,463
7.00% to 7.49%; due 2023 to 2032	44			46
7.50% to 7.99%; due 2019 to 2032	266			276
Variable interest rate:
Secured financings – .59% to 2.90%; due 2016 to 2018	879			1,473
Other variable interest rate senior debt – .84%; due 2016	1,300			1,300
Subordinated debt – 6.68% due 2021	2,208			2,208
Junior subordinated notes issued to capital trusts	—			1,031
Unamortized discount	(26		)	(33		)
HSBC acquisition purchase accounting fair value adjustments	20			22
Total long-term debt	$	9,510		$	16,427

HSBC acquisition purchase accounting fair value adjustments represent adjustments which have been “pushed down” to record our long-term debt at fair value at the date of our acquisition by HSBC.

At December 31, 2015, long-term debt included fair value adjustments relating to fair value hedges of our debt which decreased the debt's carrying value by $15 million and a foreign currency translation adjustment relating to our foreign denominated debt which decreased the debt balance by $347 million. At December 31, 2014, long-term debt included fair value adjustments relating to fair value hedges of our debt which decreased the debt's carrying value by $8 million and a foreign currency translation adjustment relating to our foreign currency denominated debt which decreased the debt balance by $189 million.

At December 31, 2015 and December 31, 2014, we have elected fair value option accounting for certain of our fixed rate debt issuances. See Note 10, “Fair Value Option,” for further details. At December 31, 2015 and December 31, 2014, long-term debt totaling $3,257 million and $6,762 million, respectively, was carried at fair value.

Interest expense for long-term debt was $688 million, $836 million and $1,141 million in 2015, 2014 and 2013, respectively. The weighted-average interest rates on long-term debt were 4.77 percent and 4.69 percent at December 31, 2015 and December 31, 2014, respectively. There are no restrictive financial covenants in any of our long-term debt agreements. Debt denominated in a foreign currency is included in the applicable rate category based on the effective U.S. dollar equivalent rate. We have hedged our exposure to this foreign currency exchange risk through the use of cross currency interest rate swaps as summarized in Note 11, “Derivative Financial Instruments.”

In November 2015, we redeemed the junior subordinated notes issued to a capital trust (“Junior Subordinated Notes”) with a principal balance prior to redemption of $1,031 million and a stated maturity of November 2035. We funded the redemption of the Junior Subordinated Notes through a $1.0 billion loan agreement with HSBC North America entered into in October 2015 and described in more detail in Note 17, "Related Party Transactions." The company-obligated mandatorily redeemable preferred securities, which were related to the Junior Subordinated Notes, were also redeemed in November 2015.

Receivables we have sold in collateralized funding transactions structured as secured financings remain on our balance sheet. The entity used in these transactions is a VIE and we are deemed to be its primary beneficiary. Accordingly, we consolidate this entity and report the debt securities issued by them as secured financings in long-term debt. Secured financings previously issued under public trusts with a balance of $879 million at December 31, 2015 are secured by $1,654 million of closed-end real estate secured receivables, which are reported as receivables in the consolidated balance sheet. Secured financings previously issued under public trusts with a balance of $1,489 million at December 31, 2014 were secured by $2,999 million of closed-end real estate secured receivables. The holders of debt instruments issued by the consolidated VIE have recourse only to the receivables securing those instruments and have no recourse to our general credit.

Maturities of long-term debt at December 31, 2015, including secured financings, are as follows:



	(in millions)
2016⁽¹⁾	$	5,064
2017	1,525
2018	275
2019	186
2020	—
Thereafter	2,460
Total	$	9,510


⁽¹⁾	Weighted average interest rate on long-term debt maturing in 2016 is 3.975 percent.