The limitations on events of default and acceleration rights described above do not apply to our senior debt
securities issued prior to May 8, 2017. Therefore, if certain defaults or breaches occur, holders of our senior debt securities issued before May 8, 2017 may be able to accelerate their securities so that such securities become immediately
due and payable, while the holders of the Notes would not be able to do so. In such an event, our obligation to repay such accelerated senior debt securities in full could adversely affect our ability to make timely payments on the Notes. These
limitations on the rights and remedies with respect to the Notes could adversely affect the market value of the Notes, especially during times of financial stress for us or our industry.
There are limited covenants in the Indenture.
Neither we nor any of our subsidiaries are restricted from incurring additional indebtedness or other liabilities, including additional senior indebtedness,
under the Indenture governing the terms of the Notes. If we incur additional indebtedness or liabilities, our ability to pay our obligations on the Notes could be adversely affected. We expect that we will from time to time incur additional
indebtedness and other liabilities. In addition, we are not restricted under the indenture from paying dividends or issuing or repurchasing our securities.
In addition, there are no financial covenants in the Indenture. You are not protected under the Indenture in the event of a highly leveraged transaction,
reorganization, default under our existing indebtedness, restructuring, merger or similar transaction that may adversely affect you, except to the extent described under Description of the Notes Consolidation, Merger and Sale of
Assets.
The Notes are not guaranteed by the FDIC, any other governmental agency or any of our subsidiaries. The Notes are structurally
subordinated to the indebtedness and other liabilities of our subsidiaries, which means that creditors of our subsidiaries generally will be paid from those subsidiaries assets before holders of the Notes would have any claims to those assets.
The Notes are not bank deposits and are not insured by the FDIC or any other governmental agency, nor are they obligations of, or guaranteed by, a
bank. The Notes are obligations of State Street Corporation only and will not be guaranteed by any of our subsidiaries, including State Street Bank, which is our principal banking subsidiary. The Notes are structurally subordinated to all
indebtedness and other liabilities of our subsidiaries (including deposits and liabilities to trade creditors), which means that creditors of our subsidiaries generally will be paid from those subsidiaries assets before holders of the Notes
would have any claims to those assets.
We and our subsidiaries have significant regulatory capital, leverage, liquidity and debt obligations;
payments on the Notes will depend on receipt of dividends and distributions from our subsidiaries.
We are a holding company and we conduct
substantially all of our operations through subsidiaries, including State Street Bank, which is our principal banking subsidiary. We are also permitted, subject to certain restrictions under our existing indebtedness, to obtain additional LTD and
working capital lines of credit to meet future financing needs. This would have the effect of increasing our total leverage. Furthermore, the Indenture relating to the Notes does not prohibit us or our subsidiaries from incurring additional secured
or unsecured indebtedness. As of June 30, 2020, on a consolidated basis, our outstanding long-term indebtedness totaled approximately $15.5 billion (including approximately $13.3 billion of long-term senior indebtedness).
We depend on dividends, distributions and other payments from our subsidiaries to fund payments on the Notes. Further, the majority of our investments are
held by our regulated subsidiaries. Our subsidiaries may be limited in their ability to make dividend payments or advance funds to us in the future because of the need to support their own capital levels. Federal banking laws regulate the amount of
dividends that may be paid by State Street Bank, our principal banking subsidiary, without prior approval.
In addition, the Federal Reserve is required
by the Dodd-Frank Act, as amended by EGRRCPA, to establish more stringent capital requirements for large bank holding companies, and especially those institutions with
12