Borrowed Funds

12 Months Ended

Dec. 31, 2015

Note 11 Borrowed Funds

The following shows the carrying value of total borrowed funds of $54.5 billion at December 31, 2015 (including adjustments related to purchase accounting, accounting hedges and unamortized original issuance discounts) by remaining contractual maturity:

• 2016: $10.9 billion,

• 2017: $10.6 billion,

• 2018: $11.2 billion,

• 2019: $8.4 billion,

• 2020: $4.7 billion, and

• 2021 and thereafter: $8.7 billion.

The following table presents the contractual rates and maturity dates of our FHLB borrowings, bank notes, senior debt and subordinated debt as of December 31, 2015.

Table 95: FHLB Borrowings, Bank Notes, Senior Debt and Subordinated Debt

December 31, 2015 - Dollars in millions			Carrying Value	Stated Rate	Maturity
FHLB (a)		$	20,108	zero-6.50%	2016-2030
Bank notes and senior debt
	Bank notes	$	16,033	zero-3.30%	2016-2043
	Senior debt		5,265	2.70%-6.70%	2016-2022
Total bank notes and senior debt		$	21,298
Subordinated debt
	Junior	$	205	.98%	2028
	Other		8,351	.82%-6.88%	2016-2025
Total subordinated debt		$	8,556
(a)	FHLB borrowings are generally collateralized by residential mortgage loans, other mortgage-related loans and commercial mortgage-backed securities.

In the table above, the carrying values for bank notes, senior debt and subordinated debt include basis adjustments of $36 million, $175 million and $246 million, respectively, related to fair value accounting hedges as of December 31, 2015.

Also included in borrowed funds are repurchase agreements. See Note 21 Commitments and Guarantees for additional information on those agreements. Additionally, certain borrowings are reported at fair value. Refer to Note 7 Fair Value for more information on those borrowings.

Junior Subordinated Debentures

PNC Capital Trust C, a wholly-owned finance subsidiary of PNC, owns junior subordinated debentures issued by PNC with a carrying value of $205 million. In June 1998, PNC Capital Trust C issued $200 million of trust preferred securities which bear interest at an annual rate of 3 month LIBOR plus 57 basis points. The trust preferred securities are due June 1, 2028 and are currently redeemable by PNC Capital Trust C at par. At December 31, 2015, the interest rate in effect was .98%. This carrying value and related net discounts of $1 million comprise the $206 million principal amount of junior subordinated debentures associated with $200 million of trust preferred securities that were issued by the Trust. In accordance with GAAP, the financial statements of the Trust are not included in PNC’s consolidated financial statements.

The obligations of PNC, as the parent of the Trust, when taken collectively, are the equivalent of a full and unconditional guarantee of the obligations of the Trust under the terms of the trust preferred securities. Such guarantee is subordinate in right of payment in the same manner as other junior subordinated debt. There are certain restrictions on PNC’s overall ability to obtain funds from its subsidiaries. For additional disclosure on these funding restrictions, see Note 19 Regulatory Matters. PNC and PNC Bank are also subject to restrictions on dividends and other provisions potentially imposed by the REIT preferred securities, including under the Exchange Agreement with PNC Preferred Funding Trust II, as described in Note 16 Equity.

PNC is subject to certain restrictions, including restrictions on dividend payments, in connection with the outstanding junior subordinated debentures. Generally, if there is (i) an event of default under the debenture, (ii) PNC elects to defer interest on the debenture, (iii) PNC exercises its right to defer payments on the related trust preferred securities, or (iv) there is a default under PNC’s guarantee of such payment obligations, then PNC would be subject during the period of such default or deferral to restrictions on dividends and other provisions protecting the status of the debenture holders similar to or in some ways more restrictive than those potentially imposed under the Exchange Agreement with PNC Preferred Funding Trust II, as described in Note 16 Equity.