In the normal course of business, we conduct transactions with HSBC and its subsidiaries. HSBC policy requires that these transactions occur at prevailing market rates and terms and, where applicable, these transactions are compliant with United States banking regulations. All extensions of credit by (and certain credit exposures of) HSBC Bank USA, National Association (together with its subsidiaries, "HSBC Bank USA") to other HSBC affiliates (other than Federal Deposit Insurance Corporation insured banks) are legally required to be secured by eligible collateral. The following tables present related party balances and the income (expense) generated by related party transactions:


	September 30, 2021		December 31, 2020
	(in millions)
Assets:
Cash and due from banks	$	313	$	516
Interest bearing deposits with banks	2		187
Securities purchased under agreements to resell(1)	873		3,941
Trading assets	190		314
Loans	2,857		1,100
Other(2)	289		319
Total assets	$	4,524	$	6,377
Liabilities:
Deposits	$	15,624	$	15,163
Trading liabilities(3)	223		2,375
Short-term borrowings	390		270
Long-term debt	5,528		2,878
Other(2)	203		268
Total liabilities	$	21,968	$	20,954


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
	(in millions)
Income (Expense):
Interest income	$	6	$	9	$	20	$	47
Interest expense	(52)		(77)		(185)		(276)
Net interest expense	(46)		(68)		(165)		(229)
Trading revenue (expense)	(1,116)		(1,755)		(2,106)		(2,372)
Servicing and other fees from HSBC affiliates:
HSBC Bank plc	44		43		124		131
HSBC Markets (USA) Inc. ("HMUS")	22		27		70		84

Other HSBC affiliates	13		9		38		40
Total servicing and other fees from HSBC affiliates	79		79		232		255
Gain (loss) on instruments designated at fair value and related derivatives	(62)		307		803		(203)
Support services from HSBC affiliates:
HTSU	(242)		(285)		(754)		(820)
HMUS	(26)		(17)		(72)		(63)
Other HSBC affiliates	(121)		(89)		(322)		(279)
Total support services from HSBC affiliates	(389)		(391)		(1,148)		(1,162)
Rental income from HSBC affiliates, net(1)	12		13		32		31
Stock based compensation expense(2)	(1)		(3)		(12)		(16)

(1)We receive rental income from our affiliates, and in some cases pay rental expense to our affiliates, for rent on certain office space. Net rental income from our affiliates is recorded as a component of occupancy expense, net in our consolidated statement of income (loss).

(2)Employees may participate in one or more stock compensation plans sponsored by HSBC. These expenses are included in salaries and employee benefits in our consolidated statement of income (loss). Certain employees are also eligible to participate in a defined benefit pension plan and other postretirement plans sponsored by HSBC North America which are discussed in Note 13, "Pension and Other Postretirement Benefits."

We use HSBC affiliates to fund a portion of our borrowing and liquidity needs. At September 30, 2021 and December 31, 2020, long-term debt with affiliates reflected $5.5 billion and $2.9 billion, respectively, of borrowings from HSBC North America. During the first quarter of 2021, $850 million of these borrowings were repaid. The remaining outstanding balances include:

We have a $4.0 billion uncommitted line of credit with HSBC North America. The available borrowing capacity under this facility is fungible between HSBC USA, HSBC Securities (USA) Inc. ("HSI") and HSBC North America, but total borrowings cannot collectively exceed $4.0 billion at any time. We had no outstanding borrowing under this credit facility at either September 30, 2021 or December 31, 2020.

HMUS and subsidiaries We have extended loans and lines of credit, some of them uncommitted, to HMUS and its subsidiaries in the amount of $11.6 billion and $12.0 billion at September 30, 2021 and December 31, 2020, respectively, of which $1.8 billion and $1.1 billion, respectively, was outstanding. The maturities of the outstanding balances range from overnight to three months. Each borrowing is re-evaluated prior to its maturity date and either extended or allowed to mature.

HSBC North America Under the $4.0 billion uncommitted fungible line of credit with HSBC North America as discussed above, there was $1.0 billion and nil outstanding at September 30, 2021 and December 31, 2020, respectively. The outstanding balance matures in April 2022.

We have extended lines of credit to various other HSBC affiliates totaling $3.9 billion and $4.7 billion which did not have any outstanding balances at either September 30, 2021 or December 31, 2020.

Other short-term affiliate lending In addition to loans and lines extended to affiliates discussed above, from time to time we may extend loans to affiliates which are generally short term in nature. At September 30, 2021 and December 31, 2020, there were $102 million and $12 million, respectively, of these loans outstanding.

Derivative contracts As part of a global HSBC strategy to offset interest rate or other market risks associated with certain securities, debt issues and derivative contracts with unaffiliated third parties, we routinely enter into derivative transactions with HSBC Bank plc and other HSBC affiliates. The notional value of derivative contracts related to these transactions was approximately $785.1 billion and $923.6 billion at September 30, 2021 and December 31, 2020, respectively. The net credit exposure (defined as the net fair value of derivative assets and liabilities, including any collateral received) related to the contracts was approximately $215 million and $66 million at September 30, 2021 and December 31, 2020, respectively. We account for these transactions on a mark to market basis, with the change in value of contracts with HSBC affiliates substantially offset by the change in value of related contracts entered into with unaffiliated third parties.

As discussed further in Note 2, "Strategic Initiatives," during the three and nine months ended September 30, 2021, we continued to transfer certain interest rate derivative contracts to HSBC Bank plc as part of our Restructuring Plan. In addition, during the third quarter of 2021, we unwound our remaining legacy structured credit products which resulted in the sale of our remaining non-government asset-backed securities held for trading and the termination of the related derivatives. A majority of the securities were sold to HSBC Bank plc and a portion of the related terminated derivatives were total return swaps with HSBC Bank plc. The loss resulting from these unwind related transactions with HSBC Bank plc was not material.

Under multiple service level agreements, we provide services to and receive services from various HSBC affiliates. These activities are summarized in Note 23, "Related Party Transactions," in our 2020 Form 10-K. There have been no significant changes in these activities since December 31, 2020.

At both September 30, 2021 and December 31, 2020, we had $1,265 million of non-cumulative preferred stock issued and outstanding to HSBC North America. See Note 18, "Preferred Stock," in our 2020 Form 10-K for additional details.