Bank of America 2012 Annual Report Download - page 223

Bank of America 2012 221
In 2012, as described in Note 14 – Shareholders’ Equity, the
Corporation entered into various agreements with certain Trust
Securities holders pursuant to which the Corporation issued 19
million shares of common stock valued at $159 million and paid
$9.4 billion in cash in exchange for $9.8 billion aggregate
liquidation amount of previously issued Trust Securities. Upon the
exchange, the Corporation immediately surrendered the Trust
Securities to the unconsolidated Trusts for cancellation, resulting
in the cancellation of an equal amount of junior subordinated notes
that had a carrying value of $9.9 billion, resulting in a gain on
extinguishment of debt of $282 million.
During 2012, the Corporation remarketed the remaining
outstanding $141 million in aggregate principal amount of its BAC
Capital Trust XIII Floating-Rate Preferred Hybrid Income Term
Securities (HITS) and the remaining outstanding $493 million in
aggregate principal amount of its BAC Capital Trust XIV Fixed-to-
Floating Rate Preferred HITS. The Corporation repurchased and
retired all of the remarketable notes in the remarketings. The net
proceeds from the remarketing of the BAC Capital Trust XIII
Floating-Rate Preferred HITS were used to satisfy the obligations
of Trust XIII under a stock purchase contract agreement, pursuant
to which Trust XIII was obligated to purchase, and the Corporation
was obligated to sell, 1,409 shares of the Corporation’s Series F
Floating Rate Non-Cumulative Preferred Stock (Series F Preferred
Stock). The net proceeds from the remarketing of the BAC Capital
Trust XIV Fixed-to-Floating Rate Preferred HITS were used to satisfy
the obligations of Trust XIV under a stock purchase contract
agreement, pursuant to which Trust XIV was obligated to purchase,
and the Corporation was obligated to sell, 4,926 shares of the
Corporation’s Series G Adjustable Rate Non-Cumulative Preferred
Stock (Series G Preferred Stock). Following the remarketing of the
notes and the subsequent purchase of the Corporation’s preferred
stock under the stock purchase contracts, the preferred stock
constitutes the sole asset of the applicable trust.
In 2011, the Corporation issued 282 million shares of common
stock valued at $1.6 billion and senior notes valued at $1.5 billion
in exchange for $3.8 billion aggregate liquidation amount of
previously issued Trust Securities. Upon the exchange, the
Corporation immediately surrendered the Trust Securities to the
unconsolidated Trusts for cancellation, resulting in the cancellation
of an equal amount of junior subordinated notes that had a carrying
value of $4.3 billion, resulting in a gain on extinguishment of debt
of $1.2 billion. In addition, the Corporation issued 26 million
shares of common stock valued at $138 million and senior notes
valued at $505 million in exchange for $917 million aggregate
liquidation amount of HITS. Upon the exchange, the Corporation
immediately surrendered the HITS to the unconsolidated Trusts
for cancellation, resulting in the cancellation of an equal amount
of junior subordinated notes that had a carrying value of $915
million, and the cancellation of a corresponding amount of the
underlying stock purchase contract, resulting in a $12 million loss
on extinguishment of debt and an increase to additional paid-in
capital of $284 million.
The table below lists each series of Trust Securities or HITS,
and the corresponding aggregate liquidation preference covered
by the Exchange Agreements described in Note 14 – Shareholders’
Equity, and other redemption activity.
Negotiated Exchanges
2012
Aggregate
Liquidation
Amount
Exchanged
2011
Aggregate
Liquidation
Amount
Exchanged
Total
Aggregate
Liquidation
Amount
Exchanged
(Dollars in millions)
HITS
Trust XIII $ — $ 559 $ 559
Trust XIV — 358 358
Trust Securities
Bank of America Capital Trust I 574 1 575
Bank of America Capital Trust II 898 2 900
Bank of America Capital Trust III 499 1 500
Bank of America Capital Trust IV 367 8 375
Bank of America Capital Trust V 514 4 518
Bank of America Capital Trust VI 141 823 964
Bank of America Capital Trust VII (1) 212 1,114 1,326
Bank of America Capital Trust VIII 2 4 6
Bank of America Capital Trust X 891 9 900
Bank of America Capital Trust XI 144 198 342
Bank of America Capital Trust XII 863 — 863
Bank of America Capital Trust XV 50 446 496
NationsBank Capital Trust II 289 76 365
NationsBank Capital Trust III 98 269 367
NationsBank Capital Trust IV 427 73 500
BankAmerica Capital II 450 — 450
BankAmerica Capital III 68 226 294
BankAmerica Institutional Capital A 450 — 450
BankAmerica Institutional Capital B 300 — 300
Barnett Capital III 186 — 186
Fleet Capital Trust II 203 47 250
Fleet Capital Trust V 29 142 171
Fleet Capital Trust VIII 534 — 534
Fleet Capital Trust IX 175 — 175
BankBoston Capital Trust III 59 136 195
BankBoston Capital Trust IV 52 96 148
Progress Capital Trust I 9 — 9
Progress Capital Trust III 10 — 10
MBNA Capital Trust A 250 — 250
MBNA Capital Trust B 45 165 210
MBNA Capital Trust D 300 — 300
MBNA Capital Trust E 200 — 200
LaSalle Series I 455 — 455
LaSalle Series J 67 — 67
Total exchanged $ 9,811 $ 4,757 $ 14,568
(1) Notes were denominated in British Pound. Presentation currency is U.S. Dollar.