Short-Term Borrowings and Long-Term Debt

The following table represents outstanding short-term borrowings and long-term debt at December 31, 2018 and 2017:



				Carrying Value
(Dollars in thousands)	Maturity	Principal value at December 31, 2018		December 31, 2018		December 31, 2017
Short-term borrowings:
Short-term FHLB advances	(1)	$	300,000	$	300,000	$	700,000
Federal funds purchased		—		—		330,000
Securities sold under agreement to repurchase	(2)	319,414		319,414		—
Other short-term borrowings	(3)	11,998		11,998		3,730
Total short-term borrowings				$	631,412	$	1,033,730
Long-term debt:
3.50% Senior Notes	January 29, 2025	$	350,000	$	347,639	$	347,303
5.375% Senior Notes	September 15, 2020	350,000		348,826		348,189
Total long-term debt				$	696,465	$	695,492


(1)	Represents advances from the FHLB at December 31, 2018 with maturity dates through January 10, 2019.


(2)	Securities sold under repurchase agreements are effectively short-term borrowings collateralized by U.S Treasury securities. Gross repurchase agreements held at December 31, 2018 have maturity dates through January 16, 2019.


(3)	Represents cash collateral received from certain counterparties in relation to market value exposures of derivative contracts in our favor.

The aggregate annual maturities of long-term debt obligations as of December 31, 2018 are as follows:



Year ended December 31, (Dollars in thousands)	Amount
2019	$	—
2020	348,826
2021	—
2022	—
2023	—
2024 and thereafter	347,639
Total	$	696,465

Interest expense related to short-term borrowings and long-term debt was $46.6 million, $36.1 million and $37.3 million in 2018, 2017 and 2016, respectively. For the years ended December 31, 2017 and 2016, interest expense is net of the hedge accounting impact from our interest rate swap agreements related to our 6.05% Subordinated Notes. The weighted average interest rate associated with our short-term borrowings was 2.62 percent as of December 31, 2018 and 1.39 percent as of December 31, 2017.

3.50% Senior Notes

In January 2015, SVB Financial issued $350 million of 3.50% Senior Notes due in January 2025. We received net proceeds of approximately $346.4 million after deducting underwriting discounts and commissions and issuance costs. The balance of our 3.50% Senior Notes at December 31, 2018 was $347.6 million, which is reflective of $2.2 million of debt issuance costs and a $0.2 million discount.

5.375% Senior Notes

In September 2010, SVB Financial issued $350 million of 5.375% Senior Notes due in September 2020. We received net proceeds of $345 million after deducting underwriting discounts and commissions and other expenses. We used approximately $250 million of the net proceeds from the sale of the notes to meet obligations due on our 3.875% Convertible Notes, which matured in April 2011. The remaining net proceeds were used for general corporate purposes, including working capital.

6.05% Subordinated Notes

In May 2007, the Bank issued 6.05% Subordinated Notes, due in June 2017, in an aggregate principal amount of $250 million ("6.05% Subordinated Notes"). Concurrent with the issuance of the 6.05% Subordinated Notes, we entered into a fixed-to-variable interest rate swap agreement. See Note 13—“Derivative Financial Instruments” of the “Notes to the Consolidated Financial Statements” under Part II, Item 8 of this report for additional details. Our 6.05% Subordinated Notes, issued by the Bank, were repaid on June 1, 2017. The interest rate swap agreement relating to this issuance was terminated upon repayment of the notes.

7.0% Junior Subordinated Debentures

In October 2003, SVB Financial issued $50 million in 7.0% Junior Subordinated Debentures to a special-purpose trust, SVB Capital II. Distributions to SVB Capital II were cumulative and were payable quarterly at a fixed rate of 7.0% per annum of the face value of the junior subordinated debentures. The junior subordinated debentures were mandatorily redeemable upon maturity in October 2033, or could be redeemed prior to maturity in whole or in part, at our option, at any time. On December 21, 2017, we redeemed in full the outstanding aggregate principal amount of $51.5 million of the 7.0% Junior Subordinated Debentures due October 15, 2033, relating to our 7.0% Cumulative Trust Preferred Securities issued by SVB Capital II and the remaining deferred issuance costs were recognized upon redemption.

Short-term Borrowings

We have certain facilities in place to enable us to access short-term borrowings on a secured and unsecured basis. Our secured facilities include collateral pledged to the FHLB of San Francisco and the discount window at the FRB (using both fixed income securities and loans as collateral). Our unsecured facility consists of our uncommitted federal funds lines. As of December 31, 2018, collateral pledged to the FHLB of San Francisco was comprised primarily of fixed income investment securities and loans and had a carrying value of $4.4 billion, of which $3.7 billion was available to support additional borrowings. As of December 31, 2018, collateral pledged to the discount window at the FRB was comprised of fixed income investment securities and had a carrying value of $0.9 billion, all of which was unused and available to support additional borrowings. Our total unused and available borrowing capacity for our uncommitted federal funds lines totaled $1.8 billion at December 31, 2018. Our total unused and available borrowing capacity under our master repurchase agreements with various financial institutions totaled $2.9 billion at December 31, 2018.