Bank of America 2013 Annual Report Download - page 218

216 Bank of America 2013
The weighted-average rates are the contractual interest rates on
the debt and do not reflect the impacts of derivative transactions.
Certain senior structured notes are accounted for under the
fair value option. For more information on these senior structured
notes, see Note 21 – Fair Value Option.
The table below shows the carrying value for aggregate annual
contractual maturities of long-term debt as of December 31, 2013.
Included in the table are certain structured notes issued by the
Corporation that contain provisions whereby the borrowings are
redeemable at the option of the holder (put options) at specified
dates prior to maturity. Other structured notes have coupon or
repayment terms linked to the performance of debt or equity
securities, indices, currencies or commodities and the maturity
may be accelerated based on the value of a referenced index or
security. In both cases, the Corporation or a subsidiary may be
required to settle the obligation for cash or other securities prior
to the contractual maturity date. These borrowings are reflected
in the table as maturing at their contractual maturity date.
In 2013 and 2012, in a combination of tender offers, calls and
open-market transactions, the Corporation purchased senior and
subordinated long-term debt with a carrying value of $9.2 billion
and $12.4 billion, and recorded net losses of $59 million and net
gains of $1.3 billion in connection with these transactions. During
2013, the Corporation had total long-term debt maturities and
purchases of $65.6 billion consisting of $39.3 billion for Bank of
America Corporation, $4.8 billion for Bank of America, N.A., $7.0
billion of other debt and $14.5 billion for consolidated VIEs.
Long-term Debt by Maturity
(Dollars in millions) 2014 2015 2016 2017 2018 Thereafter Total
Bank of America Corporation (1)
Senior notes $ 24,820 $ 15,365 $ 18,164 $ 18,273 $ 20,311 $ 35,180 $ 132,113
Senior structured notes 6,360 5,561 3,429 1,421 1,989 11,815 30,575
Subordinated notes 4 1,263 5,247 5,676 3,312 8,675 24,177
Junior subordinated notes — — — — — 7,238 7,238
Total Bank of America Corporation 31,184 22,189 26,840 25,370 25,612 62,908 194,103
Bank of America, N.A.
Senior notes 19 — 2,492 2,664 — 179 5,354
Subordinated notes — — 1,082 3,664 — 1,531 6,277
Advances from Federal Home Loan Banks 1,263 1,503 1,504 11 11 150 4,442
Total Bank of America, N.A. 1,282 1,503 5,078 6,339 11 1,860 16,073
Other debt
Senior notes 284 24 — 1 — — 309
Structured liabilities 3,614 2,049 1,520 1,723 1,281 6,726 16,913
Junior subordinated notes —————406
406
Other 200 56 930 743 37 456 2,422
Total other debt 4,098 2,129 2,450 2,467 1,318 7,588 20,050
Total long-term debt excluding consolidated VIEs 36,564 25,821 34,368 34,176 26,941 72,356 230,226
Long-term debt of consolidated VIEs 9,512 1,255 1,797 1,522 191 5,171 19,448
Total long-term debt $ 46,076 $ 27,076 $ 36,165 $ 35,698 $ 27,132 $ 77,527 $ 249,674
(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.
Trust Preferred and Hybrid Securities
Trust preferred securities (Trust Securities) are primarily issued by
trust companies (the Trusts) that are not consolidated. These Trust
Securities are mandatorily redeemable preferred security
obligations of the Trusts. The sole assets of the Trusts generally
are junior subordinated deferrable interest notes of the
Corporation or its subsidiaries (the Notes). The Trusts generally
are 100 percent-owned finance subsidiaries of the Corporation.
Obligations associated with the Notes are included in the long-
term debt table on page 215.
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 generally 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 generally 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 or its subsidiaries 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,
generally will constitute a full and unconditional guarantee, on a
subordinated basis, by the Corporation of payments due on the
Trust Securities.