NOTE 11 - BORROWINGS AND CONTRACTUAL COMMITMENTS

Other short-term borrowings

Other short-term borrowings at December 31 were as follows:



	2014				2013
(Dollars in millions)	Balance		Interest Rate		Balance		Interest Rate
FHLB advances		$4,000	0.23	%		$4,000	0.21	%
Master notes	1,280		0.15		1,554		0.28
Dealer collateral	354		0.13		232		0.10
Other	—		—		2		2.70
Total other short-term borrowings		$5,634				$5,788

Long-term debt

Long-term debt at December 31 consisted of the following:



	2014				2013
(Dollars in millions)	Maturity Date(s)	Interest Rate(s)	Balance		Balance
Parent Company Only:
Senior, fixed rate	2016 - 2028	2.35% - 6.00%		$3,630		$3,001
Senior, variable rate	2015 - 2019	0.38 - 2.00	358		283
Subordinated, fixed rate	2026	6.00	200		200
Junior subordinated, variable rate	2027 - 2028	0.89 - 1.22	627		627
Total Parent Company debt (excluding intercompany of $0 and $160 at December 31, 2014 and 2013, respectively)			4,815		4,111
Subsidiaries ¹:
Senior, fixed rate ²	2015 - 2053	0.00 - 9.65	5,682		1,006
Senior, variable rate ³	2015 - 2043	0.35 - 6.98	742		3,783
Subordinated, fixed rate ⁴	2015 - 2020	5.00 - 7.25	1,283		1,300
Subordinated, variable rate	2015	0.52 - 0.54	500		500
Total subsidiaries debt			8,207		6,589
Total long-term debt				$13,022		$10,700

¹90% and 85% of total subsidiaries debt is issued by the Bank at December 31, 2014 and 2013, respectively.

²Includes leases and other obligations that do not have a stated interest rate.

³Includes $0 and $256 million of debt recorded at fair value at December 31, 2014 and 2013, respectively.

⁴Debt recorded at fair value.

The Company held no foreign denominated debt at December 31, 2014 and 2013. Maturities of long-term debt at December 31, 2014 were as follows:



(Dollars in millions)	Parent Company		Subsidiaries
2015		$28		$1,791
2016	1,054		72
2017	1,232		4,332
2018	774		514
2019	891		30
Thereafter	836		1,468
Total		$4,815		$8,207

During 2014, the Bank issued $250 million of floating rate senior notes that pay a coupon rate of 3-month LIBOR plus 44 basis points and $600 million of fixed rate senior notes that pay a coupon rate of 1.35% under the Global Bank Note program. These notes mature in 2017 and can be called beginning one month prior to their maturity date. Furthermore, the Bank added a $1.0 billion long-term FHLB advance during 2014. The Parent Company issued $650 million of fixed rate senior notes that pay a coupon rate of 2.50%. These notes mature in 2019 and can be called beginning one month prior to their maturity date. The Company had no additional material issuances, advances, repurchases, or extinguishments of long-term debt during the year.

Restrictive provisions of several long-term debt agreements prevent the Company from creating liens on, disposing of, or issuing (except to related parties) voting stock of subsidiaries. Furthermore, there are restrictions on mergers, consolidations, certain leases, sales or transfers of assets, minimum shareholders’ equity, and maximum borrowings by the Company. At December 31, 2014, the Company was in compliance with all covenants and provisions of long-term debt agreements. As currently defined by federal bank regulators, long-term debt of $627 million qualified as Tier 1 capital at both December 31, 2014 and 2013, and long-term debt of $792 million and $1.1 billion qualified as Tier 2 capital at December 31, 2014 and 2013, respectively.

The Company does not consolidate certain wholly-owned trusts which were formed for the sole purpose of issuing trust preferred securities. The proceeds from the trust preferred securities issuances were invested in junior subordinated debentures of the Parent Company. The obligations of these debentures constitute a full and unconditional guarantee by the Parent Company of the trust preferred securities.

Contractual Commitments

In the normal course of business, the Company enters into certain contractual arrangements. Such arrangements include obligations to make future payments on lease arrangements, contractual commitments for capital expenditures, and service contracts.

At December 31, 2014, the Company had the following unconditional obligations:



(Dollars in millions)	1 year or less		1-3 years		3-5 years		After 5 years		Total
Operating leases		$205		$384		$194		$328		$1,111
Capital leases ¹	2		3		4		—		9
Purchase obligations ²	421		38		3		—		462
Total		$628		$425		$201		$328		$1,582

¹ Amounts do not include accrued interest.

² Amounts represent termination fees for legally binding purchase obligations of $5 million or more. Payments made towards the purchase of goods or services under these purchase obligations totaled $223 million during 2014.