Wells Fargo 2012 Annual Report Download - page 180

Note 8: Securitizations and Variable Interest Entities (continued)
Transactions with Consolidated VIEs and Secured
Borrowings
The following table presents a summary of transfers of financial
assets accounted for as secured borrowings and involvements
with consolidated VIEs. “Consolidated assets” are presented
using GAAP measurement methods, which may include fair
value, credit impairment or other adjustments, and therefore in
some instances will differ from “Total VIE assets.” For VIEs that
obtain exposure synthetically through derivative instruments,
the remaining notional amount of the derivative is included in
“Total VIE assets.” On the consolidated balance sheet, we
separately disclose the consolidated assets of certain VIEs that
can only be used to settle the liabilities of those VIEs.
Carrying value
Total Third
VIE Consolidated party Noncontrolling Net
(in millions) assets assets liabilities interests assets
December 31, 2012
Secured borrowings:
Municipal tender option bond securitizations $ 16,782 15,130 (13,248) - 1,882
Commercial real estate loans 975 975 (696) - 279
Residential mortgage securitizations 5,757 6,240 (5,824) - 416
Total secured borrowings 23,514 22,345 (19,768) - 2,577
Consolidated VIEs:
Nonconforming residential
mortgage loan securitizations 8,633 7,707 (2,933) - 4,774
Multi-seller commercial paper conduit 2,059 2,036 (2,053) - (17)
Auto loan securitizations - - - - -
Structured asset finance 71 71 (17) - 54
Investment funds 1,837 1,837 (2) - 1,835
Other 3,454 2,974 (1,438) (48) 1,488
Total consolidated VIEs 16,054 14,625 (6,443) (48) 8,134
Total secured borrowings and consolidated VIEs $ 39,568 36,970 (26,211) (48) 10,711
December 31, 2011
Secured borrowings:
Municipal tender option bond securitizations $ 14,168 11,748 (10,689) - 1,059
Commercial real estate loans 1,168 1,168 (1,041) - 127
Residential mortgage securitizations 5,705 6,114 (5,759) - 355
Total secured borrowings 21,041 19,030 (17,489) - 1,541
Consolidated VIEs:
Nonconforming residential
mortgage loan securitizations 11,375 10,244 (4,514) - 5,730
Multi-seller commercial paper conduit 2,860 2,860 (2,935) - (75)
Auto loan securitizations 163 163 (143) - 20
Structured asset finance 124 124 (16) - 108
Investment funds 2,012 2,012 (22) - 1,990
Other 3,432 2,812 (1,890) (61) 861
Total consolidated VIEs 19,966 18,215 (9,520) (61) 8,634
Total secured borrowings and consolidated VIEs $ 41,007 37,245 (27,009) (61) 10,175
In addition to the transactions included in the previous table,
at both December 31, 2012, and 2011, we had approximately
$6.0 billion of private placement debt financing issued through a
consolidated VIE. The issuance is classified as long-term debt in
our consolidated financial statements. At December 31, 2012,
and 2011, we pledged approximately $6.4 billion and $6.2 billion
in loans (principal and interest eligible to be capitalized),
$179 million and $316 million in securities available for sale, and
$138 million and $154 million in cash and cash equivalents to
collateralize the VIE’s borrowings, respectively. These assets
were not transferred to the VIE, and accordingly we have
excluded the VIE from the previous table.
We have raised financing through the securitization of certain
financial assets in transactions with VIEs accounted for as
secured borrowings. We also consolidate VIEs where we are the
primary beneficiary. In certain transactions other than the
multi-seller commercial paper conduit, we provide contractual
support in the form of limited recourse and liquidity to facilitate
the remarketing of short-term securities issued to third party
investors. Other than this limited contractual support, the assets
of the VIEs are the sole source of repayment of the securities
held by third parties. The liquidity support we provide to the
multi-seller commercial paper conduit ensures timely repayment
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