Bank of America 2006 Annual Report Download - page 127

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 subordinated notes. The notes may be
denominated in U.S. dollars or foreign currencies. At December 31, 2006
and 2005, the amount of foreign currency denominated debt translated
into U.S. dollars included in total long-term debt was $37.8 billion and
$23.1 billion. Foreign currency contracts are used to convert certain for-
eign currency denominated debt into U.S. dollars.
At December 31, 2006 and 2005, Bank of America Corporation was
authorized to issue approximately $58.1 billion and $27.0 billion of addi-
tional corporate debt and other securities under its existing shelf registra-
tion statements. At December 31, 2006 and 2005, Bank of America, N.A.
was authorized to issue approximately $30.8 billion and $9.5 billion of
bank notes and Euro medium-term notes.
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, 2006) were 5.32 percent, 5.41 percent and 5.18
percent, respectively, at December 31, 2006 and (based on the rates in
effect at December 31, 2005) were 5.22 percent, 5.53 percent and 4.31
percent, respectively, at December 31, 2005. 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, 2006 are as follows:
(Dollars in millions) 2007 2008 2009 2010 2011 Thereafter Total
Bank of America Corporation $ 4,377 $11,031 $15,260 $11,585 $7,943 $55,360 $105,556
Bank of America, N.A. and other subsidiaries 11,158 13,279 1,705 871 162 6,706 33,881
NB Holdings Corporation –––––773773
Other 1,659 2,668 1,019 234 4 206 5,790
Total $ 17,194 $ 26,978 $ 17,984 $ 12,690 $ 8,109 $ 63,045 $ 146,000
Trust Preferred Securities
Trust preferred securities (Trust Securities) are issued by the trust compa-
nies (the Trusts), which are not consolidated. These Trust Securities are
mandatorily 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 associated with the
Notes are included in the Long-term Debt table on the previous page. See
Note 15 of the Consolidated Financial Statements for a discussion regard-
ing the treatment for regulatory capital purposes of the Trust Securities.
At December 31, 2006, the Corporation had 38 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 Secu-
rities 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 ear-
lier redemption at a redemption price equal to their liquidation amount
plus accrued distributions to the date fixed for redemption and the pre-
mium, 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 Corpo-
ration 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 sub-
ordinated basis, by the Corporation of payments due on the Trust
Securities.
Bank of America 2006 125