AUBURN NATIONAL BANCORPORATION, INC Debt Disclosure
NOTE 10: LONG-TERM DEBT
At December 31, 2018 and 2017, the composition of long-term debt is presented below.
| 2018 | 2017 | ||||||||||||
| Weighted | Weighted | ||||||||||||
| (Dollars in thousands) | Amount | Avg. Rate | Amount | Avg. Rate | |||||||||
| Subordinated debentures, due 2033 | $ | — | — | % | $ | 3,217 | 4.63 | % | |||||
| Total long-term debt | $ | — | — | % | $ | 3,217 | 4.63 | % | |||||
The Company formed Auburn National Bancorporation Capital Trust I (the “Trust”), a wholly-owned statutory business trust, in 2003. The Trust issued $7.0 million of trust preferred securities that were sold to third parties. The proceeds from the sale of the trust preferred securities and trust common securities that we held, were used to purchase junior subordinated debentures of $7.2 million from the Company, which are presented as long-term debt in the consolidated balance sheets and qualify for inclusion in Tier 1 capital for regulatory capital purposes, subject to certain limitations. The debentures would have matured on December 31, 2033 and had been redeemable since December 31, 2008.
On April 27, 2018, the Trust formally redeemed all of its issued and outstanding trust preferred securities at par. The Company had repurchased $4.0 million par amount of trust preferred securities issued by the Trust in October 2016, at a discount. The additional amount paid on April 27, 2018 for trust preferred securities not previously purchased by the Company was approximately $3.0 million, including accrued and unpaid distributions. All junior subordinated debentures related to the Trust were redeemed and retired as a result of the action.
The Company now has no outstanding trust preferred securities or junior subordinated debentures, and the Trust has been dissolved.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2018 | Mar 12, 2019 | Showing above |
| 2017 | Mar 13, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 10, 2016 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.