Bank of America 2013 Annual Report Download - page 217

Bank of America 2013 215
NOTE 11 Long-term Debt
Long-term debt consists of borrowings having an original maturity of one year or more. The table below presents the balance of long-
term debt at December 31, 2013 and 2012, and the related contractual rates and maturity dates as of December 31, 2013.
December 31
(Dollars in millions) 2013 2012
Notes issued by Bank of America Corporation (1)
Senior notes:
Fixed, with a weighted-average rate of 4.99%, ranging from 1.25% to 8.83%, due 2014 to 2042 $ 109,845 $ 114,493
Floating, with a weighted-average rate of 0.99%, ranging from 0.05% to 4.99%, due 2014 to 2044 22,268 24,698
Senior structured notes 30,575 33,962
Subordinated notes:
Fixed, with a weighted-average rate of 5.83%, ranging from 2.40% to 10.20%, due 2014 to 2038 22,379 24,118
Floating, with a weighted-average rate of 1.13%, ranging from 0.57% to 2.97%, due 2016 to 2026 1,798 1,767
Junior subordinated notes (related to trust preferred securities):
Fixed, with a weighted-average rate of 6.84%, ranging from 5.25% to 8.05%, due 2027 to perpetual 6,685 6,655
Floating, with a weighted-average rate of 0.92%, ranging from 0.79% to 1.24%, due 2027 to 2056 553 567
Total notes issued by Bank of America Corporation 194,103 206,260
Notes issued by Bank of America, N.A.
Senior notes:
Fixed, with a weighted-average rate of 2.97%, ranging from 0.07% to 7.72%, due 2014 to 2187 1,670 181
Floating, with a weighted-average rate of 0.70%, ranging from 0.35% to 0.75%, due 2016 to 2041 3,684 2,686
Subordinated notes:
Fixed, with a weighted-average rate of 5.68%, ranging from 5.30% to 6.10%, due 2016 to 2036 4,876 5,230
Floating, with a weighted-average rate of 0.53%, ranging from 0.25% to 0.54%, due 2016 to 2019 1,401 1,401
Advances from Federal Home Loan Banks:
Fixed, with a weighted-average rate of 4.91%, ranging from 0.01% to 7.72%, due 2014 to 2034 1,441 6,225
Floating, with a weighted-average rate of 0.28%, ranging from 0.27% to 0.29%, due 2015 to 2016 3,001 —
Total notes issued by Bank of America, N.A. 16,073 15,723
Other debt
Senior notes:
Fixed, with a weighted-average rate of 5.01%, ranging from 4.00% to 5.50%, due 2014 to 2021 194 262
Floating, with a weighted-average rate of 2.55%, ranging from 1.93% to 2.71%, due 2014 to 2015 115 705
Structured liabilities 16,913 16,127
Junior subordinated notes (related to trust preferred securities):
Fixed, with a weighted-average rate of 7.14%, ranging from 7.00% to 7.28%, perpetual 340 340
Floating, with a weighted-average rate of 0.87%, due 2027 66 979
Other 2,422 933
Total other debt 20,050 19,346
Total long-term debt excluding consolidated VIEs 230,226 241,329
Long-term debt of consolidated VIEs 19,448 34,256
Total long-term debt $ 249,674 $ 275,585
(1) On October 1, 2013, the merger of Merrill Lynch & Co., Inc. into Bank of America Corporation was completed. Effective with this merger, Bank of America Corporation assumed outstanding Merrill
Lynch & Co., Inc. debt including trust preferred securities.
Bank of America Corporation and Bank of America, N.A.
maintain various U.S. and non-U.S. debt programs to offer both
senior and subordinated notes. The notes may be denominated
in U.S. dollars or foreign currencies. At December 31, 2013 and
2012, the amount of foreign currency-denominated debt translated
into U.S. dollars included in total long-term debt was $73.4 billion
and $95.3 billion. Foreign currency contracts may be used to
convert certain foreign currency-denominated debt into U.S.
dollars.
At December 31, 2013, long-term debt of consolidated VIEs in
the table above included debt of credit card, home equity and all
other VIEs of $11.8 billion, $1.5 billion and $6.2 billion,
respectively. Long-term debt of VIEs is collateralized by the assets
of the VIEs. For additional information, see Note 6 – Securitizations
and Other Variable Interest Entities.
At December 31, 2013 and 2012, Bank of America Corporation
had approximately $131.3 billion and $154.9 billion of authorized,
but unissued corporate debt and other securities under its existing
U.S. shelf registration statements. At December 31, 2013 and
2012, Bank of America, N.A. had $51.8 billion and $65.5 billion
of authorized, but unissued bank notes under its existing $75
billion bank note program. Long-term bank notes issued and
outstanding under the program totaled $8.1 billion and $5.6 billion
at December 31, 2013 and 2012. At both December 31, 2013
and 2012, Bank of America, N.A. had $20.6 billion of authorized,
but unissued mortgage notes under its $30 billion mortgage bond
program.
The weighted-average effective interest rates for total long-term
debt (excluding senior structured notes), total fixed-rate debt and
total floating-rate debt were 4.37 percent, 5.14 percent and 0.92
percent, respectively, at December 31, 2013 and 4.71 percent,
5.52 percent and 0.93 percent, respectively, at December 31,
2012. The Corporation’s ALM activities maintain an overall interest
rate risk management strategy that incorporates the use of
interest rate contracts to manage fluctuations in earnings that are
caused by interest rate volatility. The Corporation’s goal is to
manage interest rate sensitivity so that movements in interest
rates do not significantly adversely affect earnings and capital.