TD Ameritrade 2018 Annual Report

47 Fair Value Hedging — We are exposed to changes in the fair value of our fixed-rate Senior Notes resulting from interest rate fluctuations. To hedge this exposure, we entered into fixed-for-variable interest rate swaps on each of the Senior Notes. Each fixed-for-variable interest rate swap has a notional amount and a maturity date matching the aggregate principal amount and maturity date, respectively, for each of the respective Senior Notes. The interest rate swaps effectively change the fixed-rate interest on the Senior Notes to variable-rate interest. Under the terms of the interest rate swap agreements, we receive semi-annual fixed-rate interest payments based on the same rates applicable to the Senior Notes, and make quarterly variable-rate interest payments based on three-month LIBOR plus (a) 2.3745% for the swap on the 2019 Notes, (b) 0.9486% for the swap on the 2022 Notes, (c) 1.1022% for the swap on the 2025 Notes and (d) 1.0340% for the swap on the 2027 Notes. As of September 30, 2018, the weighted average effective interest rate on the aggregate principal balance of the Senior Notes was 3.62%. Lines of Credit —TDAC utilizes secured uncommitted lines of credit for short-term liquidity. Under these secured uncommitted lines, TDAC borrows on a demand basis from two unaffiliated banks and pledges client margin securities as collateral. Advances under the secured uncommitted lines are dependent on having acceptable collateral as determined by each secured uncommitted credit agreement. At September 30, 2018, the terms of the secured uncommitted credit agreements do not specify borrowing limits. The availability of TDAC's secured uncommitted lines is subject to approval by the individual banks each time an advance is requested and may be denied at their discretion. There were no borrowings outstanding under the secured uncommitted lines of credit as of September 30, 2018. Securities Sold Under Agreements to Repurchase (repurchase agreements) — Under repurchase agreements, we receive cash from the counterparty and provide U.S. government debt securities as collateral. Our repurchase agreements generally mature between 30 and 90 days following the transaction date and are accounted for as secured borrowings. The weighted average interest rate on the $96 million outstanding repurchase agreement balance as of September 30, 2018 was 2.35%. TD AmeritradeHoldingCorporation Senior RevolvingCredit Facility —The Parent has access to a senior unsecured committed revolving credit facility in the aggregate principal amount of $300 million (the "Parent Revolving Facility"). The maturity date of the Parent Revolving Facility is April 21, 2022. There were no borrowings outstanding under the Parent Revolving Facility as of September 30, 2018. TD Ameritrade Clearing, Inc. Senior Revolving Credit Facilities — TDAC has access to two senior unsecured committed revolving credit facilities with an aggregate principal amount of $1.45 billion, consisting of a $600 million (the "$600 Million Revolving Facility") and an $850 million (the "$850 Million Revolving Facility") senior revolving facility. The maturity dates of the $600 Million Revolving Facility and the $850 Million Revolving Facility areApril 21, 2022 and May 16, 2019, respectively. There were no borrowings outstanding under the TDAC senior revolving facilities as of September 30, 2018. Intercompany Credit Agreements — The Parent has entered into credit agreements with each of its primary broker- dealer and FCM/FDM subsidiaries, under which the Parent may make loans of cash or securities under committed and/or uncommitted lines of credit. Key information about the committed and/or uncommitted lines of credit is summarized in the following table (dollars in millions): Borrower Subsidiary Committed Facility Uncommitted Facility (1) Termination Date TD Ameritrade Clearing, Inc.. . . . . . . . . . . . . . . . . . . . $400 $300 March 1, 2022 TD Ameritrade, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . N/A $300 March 1, 2022 TD Ameritrade Futures & Forex LLC . . . . . . . . . . . . . $45 N/A August 11, 2021 (1) The Parent is permitted, but under no obligation, to make loans under uncommitted facilities. There were no borrowings outstanding under any of the intercompany credit agreements as of September 30, 2018.