Bank of America 2004 Annual Report Download - page 123

122 BANK OF AMERICA 2004
The majority of the floating rates are based on three- and six-month
London InterBank Offered Rates (LIBOR). Bank of America
Corporation and Bank of America, N.A. maintain various domestic
and international debt programs to offer both senior and subordi-
nated notes. The notes may be denominated in U.S. dollars or foreign
currencies. Foreign currency contracts are used to convert certain
foreign currency-denominated debt into U.S. dollars.
At December 31, 2004 and 2003, Bank of America Corporation
was authorized to issue approximately $37.1 billion and $26.0 bil-
lion, respectively, of additional corporate debt and other securities
under its existing shelf registration statements. At December 31,
2004 and 2003, Bank of America, N.A. was authorized to issue
approximately $27.2 billion and $25.9 billion, respectively, of bank
notes and Euro medium-term notes.
Including the effects of interest rate contracts for certain long-
term debt issuances, the weighted average effective interest rates for
total long-term debt, total fixed-rate debt and total floating-rate debt
(based on the rates in effect at December 31, 2004) were 3.19 per-
cent, 6.36 percent and 2.67 percent, respectively, at December 31,
2004 and (based on the rates in effect at December 31, 2003) were
2.36 percent, 6.01 percent and 1.41 percent, respectively, at
December 31, 2003. These obligations were denominated primarily
in U.S. dollars.
Aggregate annual maturities of long-term debt obligations
(based on final maturity dates) at December 31, 2004 are as follows:
122 BANK OF AMERICA 2004
(Dollars in millions) 2005 2006 2007 2008 2009 Thereafter Total
Bank of America Corporation $ 5,867 $ 8,326 $ 8,286 $ 6,191 $ 8,153 $46,046 $82,869
Bank of America, N.A. 1,760 1,437 1,145 2,429 400 1,519 8,690
NB Holdings Corporation – – – – – 773 773
Other 1,884 2,739 565 104 21 433 5,746
Total $ 9,511 $ 12,502 $ 9,996 $ 8,724 $ 8,574 $ 48,771 $ 98,078
Trust Preferred Securities
Trust preferred securities (Trust Securities) are issued by the trust
companies (the Trusts) that were deconsolidated by the Corporation
as a result of the adoption of FIN 46. These securities are mandato-
rily redeemable preferred security obligations of the Trusts. The sole
assets of the Trusts are Junior Subordinated Deferrable Interest
Notes of the Corporation (the Notes). The Trusts are 100 percent
owned finance subsidiaries of the Corporation. Obligations associ-
ated with these securities are included in junior subordinated notes
related to Trust Securities in the Long-term Debt table on page 121.
See Note 14 of the Consolidated Financial Statements for a discus-
sion regarding the potential change in treatment for regulatory capi-
tal purposes of the Trust Securities.
At December 31, 2004, the Corporation had 30 Trusts which
have issued Trust Securities to the public. Certain of the Trust
Securities were issued at a discount and may be redeemed prior to
maturity at the option of the Corporation. The Trusts have invested
the proceeds of such Trust Securities in the Notes. Each issue of the
Notes has an interest rate equal to the corresponding Trust
Securities distribution rate. The Corporation has the right to defer
payment of interest on the Notes at any time, or from time to time,
for a period not exceeding five years provided that no extension
period may extend beyond the stated maturity of the relevant Notes.
During any such extension period, distributions on the Trust
Securities will also be deferred, and the Corporation’s ability to pay
dividends on its common and preferred stock will be restricted.
The Trust Securities are subject to mandatory redemption upon
repayment of the related Notes at their stated maturity dates or their
earlier redemption at a redemption price equal to their liquidation
amount plus accrued distributions to the date fixed for redemption
and the premium, if any, paid by the Corporation upon concurrent
repayment of the related Notes.
Periodic cash payments and payments upon liquidation or
redemption with respect to Trust Securities are guaranteed by the
Corporation to the extent of funds held by the Trusts (the Preferred
Securities Guarantee). The Preferred Securities Guarantee, when
taken together with the Corporation’s other obligations, including its
obligations under the Notes, will constitute a full and unconditional
guarantee, on a subordinated basis, by the Corporation of payments
due on the Trust Securities.