WELLS FARGO & COMPANY/MNWFC
WELLS FARGO & COMPANY/MN Debt Disclosure
Note 15: Long-Term Debt |
We issue long-term debt denominated in multiple currencies, largely in U.S. dollars. Our issuances have both fixed and floating interest rates. As a part of our overall interest rate risk management strategy, we often use derivatives to manage our exposure to interest rate risk. We also use derivatives to manage our exposure to foreign currency risk. As a result, approximately half of the long-term debt presented below is hedged in a fair value or cash flow hedge relationship. See Note 18 (Derivatives) for further information on qualifying hedge contracts.
Table 15.1 presents a summary of our long-term debt carrying values, reflecting unamortized debt discounts and premiums, and purchase accounting adjustments, where applicable. The interest rates displayed represent the range of contractual rates in effect at December 31, 2019. These interest rates do not include the effects of any associated derivatives designated in a hedge accounting relationship.
Table 15.1: Long-Term Debt
December 31, | ||||||||||
2019 | 2018 | |||||||||
(in millions) | Maturity date(s) | Stated interest rate(s) | ||||||||
Wells Fargo & Company (Parent only) | ||||||||||
Senior | ||||||||||
Fixed-rate notes (1) | 2020-2047 | 0.38 - 6.75% | $ | 86,618 | 77,742 | |||||
Floating-rate notes | 2020-2048 | 0.02-3.24% | 16,800 | 19,553 | ||||||
FixFloat notes | 2025-2030 | 2.41-3.58% | 12,030 | 2,901 | ||||||
Structured notes (2) | 8,390 | 7,984 | ||||||||
Total senior debt - Parent | 123,838 | 108,180 | ||||||||
Subordinated | ||||||||||
Fixed-rate notes (3) | 2023-2046 | 3.45-7.57% | 27,195 | 25,428 | ||||||
Total subordinated debt - Parent | 27,195 | 25,428 | ||||||||
Junior subordinated | ||||||||||
Fixed-rate notes - trust securities | 2029-2036 | 5.95-7.95% | 1,428 | 1,308 | ||||||
Floating-rate notes | 2027 | 2.50-3.00% | 318 | 308 | ||||||
Total junior subordinated debt - Parent (4) | 1,746 | 1,616 | ||||||||
Total long-term debt - Parent (3) | 152,779 | 135,224 | ||||||||
Wells Fargo Bank, N.A., and other bank entities (Bank) | ||||||||||
Senior | ||||||||||
Fixed-rate notes | 2020-2023 | 2.40-3.63% | 9,364 | 14,222 | ||||||
Floating-rate notes | 2020-2053 | 1.64-2.55% | 10,617 | 6,617 | ||||||
FixFloat notes | 2021-2022 | 2.08-3.33% | 5,097 | 1,998 | ||||||
Fixed-rate advances - Federal Home Loan Bank (FHLB) | 2020-2031 | 3.83-7.50% | 41 | 51 | ||||||
Floating-rate advances - FHLB | 2020-2022 | 1.83-2.31% | 32,950 | 53,825 | ||||||
Structured notes (2) | 1,914 | 1,646 | ||||||||
Finance leases | 2020-2029 | 1.69-17.78% | 32 | 36 | ||||||
Total senior debt - Bank | 60,015 | 78,395 | ||||||||
Subordinated | ||||||||||
Fixed-rate notes | 2023-2038 | 5.25-7.74% | 5,374 | 5,199 | ||||||
Total subordinated debt - Bank | 5,374 | 5,199 | ||||||||
Junior subordinated | ||||||||||
Floating-rate notes | 2027 | 2.48-2.65% | 363 | 352 | ||||||
Total junior subordinated debt - Bank (4) | 363 | 352 | ||||||||
Long-term debt issued by VIE - Fixed rate | 2037 | 6.00% | 17 | 160 | ||||||
Long-term debt issued by VIE - Floating rate | 2020-2038 | 2.38-4.62% | 570 | 656 | ||||||
Mortgage notes and other debt (5) | 2020-2057 | 9.20% | 6,185 | 6,637 | ||||||
Total long-term debt - Bank | 72,524 | 91,399 | ||||||||
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December 31, | |||||||||||
2019 | 2018 | ||||||||||
(in millions) | Maturity date(s) | Stated interest rate(s) | |||||||||
Other consolidated subsidiaries | |||||||||||
Senior | |||||||||||
Fixed-rate notes | 2021-2023 | 3.04-3.46% | 1,352 | 2,383 | |||||||
Structured notes (2) | 1,503 | 6 | |||||||||
Finance leases | 2020 | 3.71 | % | 1 | — | ||||||
Total senior debt - Other consolidated subsidiaries | 2,856 | 2,389 | |||||||||
Mortgage notes and other | 2026 | 3.27% | 32 | 32 | |||||||
Total long-term debt - Other consolidated subsidiaries | 2,888 | 2,421 | |||||||||
Total long-term debt | $ | 228,191 | 229,044 | ||||||||
(1) | Includes $66 million of outstanding zero coupon callable notes at December 31, 2019. |
(2) | Included in the table are certain structured notes that have coupon or repayment terms linked to the performance of debt or equity securities, an embedded equity, commodity, or currency index, or basket of indices accounted for separately from the note as a free-standing derivative, and the maturity may be accelerated based on the value of a referenced index or security. For information on embedded derivatives, see the “Derivatives Not Designated as Hedging Instruments” section in Note 18 (Derivatives). In addition, a major portion consists of zero coupon callable notes where interest is paid as part of the final redemption amount. |
(3) | Includes fixed-rate subordinated notes issued by the Parent at a discount of $128 million and $131 million in 2019 and 2018, respectively, and debt issuance costs of $2 million in both 2019 and 2018, to effect a modification of Wells Fargo Bank, N.A., notes. These subordinated notes are carried at their par amount on the balance sheet of the Parent presented in Note 28 (Parent-Only Financial Statements). In addition, Parent long-term debt presented in Note 28 also includes affiliate related issuance costs of $281 million and $278 million in 2019 and 2018, respectively. |
(4) | Represents junior subordinated debentures held by unconsolidated wholly-owned trusts formed for the sole purpose of issuing trust preferred securities. See Note 10 (Securitizations and Variable Interest Entities) for additional information. |
(5) | Largely relates to unfunded commitments for LIHTC investments. For additional information, see Note 8 (Equity Securities). |
We issue long-term debt in a variety of maturities and currencies to achieve cost-efficient funding and to maintain an appropriate maturity profile. Long-term debt of $228.2 billion at December 31, 2019, decreased $853 million from December 31, 2018. We issued $53.4 billion of long-term debt in 2019.
The aggregate carrying value of long-term debt that matures (based on contractual payment dates) as of December 31, 2019, in each of the following five years and thereafter is presented in Table 15.2.
Table 15.2: Maturity of Long-Term Debt
December 31, 2019 | |||||||||||||||||||||
(in millions) | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||
Wells Fargo & Company (Parent Only) | |||||||||||||||||||||
Senior notes | $ | 13,429 | 18,163 | 18,091 | 11,104 | 9,387 | 53,664 | 123,838 | |||||||||||||
Subordinated notes | — | — | — | 3,653 | 737 | 22,805 | 27,195 | ||||||||||||||
Junior subordinated notes | — | — | — | — | — | 1,746 | 1,746 | ||||||||||||||
Total long-term debt - Parent | 13,429 | 18,163 | 18,091 | 14,757 | 10,124 | 78,215 | 152,779 | ||||||||||||||
Wells Fargo Bank, N.A., and other bank entities (Bank) | |||||||||||||||||||||
Senior notes | 23,415 | 27,865 | 5,585 | 2,884 | 6 | 260 | 60,015 | ||||||||||||||
Subordinated notes | — | — | — | 1,071 | — | 4,303 | 5,374 | ||||||||||||||
Junior subordinated notes | — | — | — | — | — | 363 | 363 | ||||||||||||||
Securitizations and other bank debt | 2,658 | 1,138 | 633 | 224 | 157 | 1,962 | 6,772 | ||||||||||||||
Total long-term debt - Bank | 26,073 | 29,003 | 6,218 | 4,179 | 163 | 6,888 | 72,524 | ||||||||||||||
Other consolidated subsidiaries | |||||||||||||||||||||
Senior notes | 144 | 1,761 | 93 | 435 | 118 | 305 | 2,856 | ||||||||||||||
Securitizations and other bank debt | — | — | — | — | — | 32 | 32 | ||||||||||||||
Total long-term debt - Other consolidated subsidiaries | 144 | 1,761 | 93 | 435 | 118 | 337 | 2,888 | ||||||||||||||
Total long-term debt | $ | 39,646 | 48,927 | 24,402 | 19,371 | 10,405 | 85,440 | 228,191 | |||||||||||||
As part of our long-term and short-term borrowing arrangements, we are subject to various financial and operational covenants. Some of the agreements under which debt has been issued have provisions that may limit the merger or sale of certain subsidiary banks and the issuance of capital stock or convertible securities by certain subsidiary banks. At December 31, 2019, we were in compliance with all the covenants.
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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.