Bank of America 2014 Annual Report Download - page 211

Bank of America 2014 209
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.
During 2014, the Corporation had total long-term debt
maturities and purchases of $53.7 billion consisting of $33.9
billion for Bank of America Corporation, $8.9 billion for Bank of
America, N.A. and $10.9 billion of other debt. 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, $16.0 billion for Bank of America, N.A. and $10.3
billion of other debt. In 2013, 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 recorded net losses of $59 million in connection
with these transactions.
Long-term Debt by Maturity
(Dollars in millions) 2015 2016 2017 2018 2019 Thereafter Total
Bank of America Corporation
Senior notes $ 14,905 $ 17,373 $ 18,935 $ 20,006 $ 16,206 $ 40,203 $ 127,628
Senior structured notes 5,558 2,825 1,791 1,885 1,526 8,583 22,168
Subordinated notes 1,221 5,074 5,219 2,951 1,580 12,655 28,700
Junior subordinated notes —————7,275
7,275
Total Bank of America Corporation 21,684 25,272 25,945 24,842 19,312 68,716 185,771
Bank of America, N.A. (1)
Senior notes 777 2,498 5,162 — 19 123 8,579
Subordinated notes — 1,069 3,553 — 1 1,699 6,322
Advances from Federal Home Loan Banks 4,503 6,003 10 10 16 141 10,683
Securitizations and other Bank VIEs (2) 1,151 1,298 3,554 — 2,450 1,429 9,882
Total Bank of America, N.A. 6,431 10,868 12,279 10 2,486 3,392 35,466
Other debt
Senior notes 21 — 1 — — — 22
Structured liabilities 2,314 2,133 2,296 1,281 1,027 6,920 15,971
Junior subordinated notes —————405
405
Nonbank VIEs (2) 20 348 255 102 27 2,673 3,425
Other 254 927 429 45 4 420 2,079
Total other debt 2,609 3,408 2,981 1,428 1,058 10,418 21,902
Total long-term debt $ 30,724 $ 39,548 $ 41,205 $ 26,280 $ 22,856 $ 82,526 $ 243,139
(1) On October 1, 2014, FIA Card Services, N.A. was merged into Bank of America, N.A.
(2) Represents the total long-term debt included in the liabilities of consolidated VIEs on the Consolidated Balance Sheet.
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 208.
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.
In 2013, the Corporation entered into various agreements with
certain Trust Securities holders pursuant to which the Corporation
paid $933 million in cash in exchange for $934 million 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 $934 million, resulting in an
insignificant gain.