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, 2016.



	December 31, 2016			December 31, 2015
	(in millions)
Senior debt:
Fixed rate:
3.00% to 3.99%	$	—		$	88
4.00% to 4.99%; due 2018	70			68
5.00% to 5.49%; due 2017 to 2021	1,182			1,211
5.50% to 5.99%; due 2017 to 2018	139			1,999
6.00% to 6.49%; due 2017	29			1,369
7.00% to 7.49%; due 2023 to 2032	37			37
7.50% to 7.99%; due 2019 to 2032	237			266
Variable rate:
Secured financings – .93% to 3.24%; due 2017 to 2018	404			879
Other variable interest rate senior debt – .84%	—			1,300
Subordinated debt – 6.68%; due 2021	2,208			2,208
Mark-to-market adjustment on fair value option long-term debt	36			91
Unamortized discount	(21		)	(26		)
HSBC acquisition purchase accounting fair value adjustments	19			20
Total long-term debt	$	4,340		$	9,510

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, 2016 and December 31, 2015, we have elected fair value option accounting for certain of our fixed rate debt issuances. See Note 9, "Fair Value Option," for further details. At December 31, 2016 and December 31, 2015, long-term debt totaling $1,317 million and $3,257 million, respectively, was carried at fair value.

At December 31, 2016, long-term debt included fair value adjustments relating to terminated 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 $359 million. At December 31, 2015, long-term debt included fair value adjustments relating to terminated 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 currency denominated debt which decreased the debt balance by $347 million.

In 2016, we entered into a $3 million, 364-day revolving credit facility agreement with an unaffiliated bank to satisfy mandatory requirements of certain states to maintain a back-up line of credit from an unrelated third party. This credit facility required us to post $3 million in collateral with this third-party bank.

Interest expense for long-term debt was $329 million, $688 million and $836 million in 2016, 2015 and 2014, respectively. The weighted-average interest rates on long-term debt were 5.72 percent and 4.77 percent at December 31, 2016 and December 31, 2015, 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 10, "Derivative Financial Instruments".

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 $404 million at December 31, 2016 are secured by $750 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 $879 million at December 31, 2015 were secured by $1,654 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, 2016, including secured financings based on the anticipated clean-up date for the collateralized funding transaction, are as follows:



	(in millions)
2017⁽¹⁾	$	1,448
2018	271
2019	155
2020	—
2021	2,326
Thereafter	140
Total	$	4,340


⁽¹⁾	Weighted average interest rate on long-term debt maturing in 2017 is 4.42 percent.