Bank of America 2015 Annual Report Download - page 186

184 Bank of America 2015
The Corporation’s maximum loss exposure to consolidated and
unconsolidated CDOs totaled $543 million and $780 million at
December 31, 2015 and 2014. This exposure is calculated on a
gross basis and does not reflect any benefit from insurance
purchased from third parties.
At December 31, 2015, the Corporation had $922 million of
aggregate liquidity exposure, included in the Other VIEs table net
of previously recorded losses, to unconsolidated CDOs which hold
senior CDO debt securities or other debt securities on the
Corporation’s behalf. For additional information, see Note 12 –
Commitments and Contingencies.
Investment Vehicles
The Corporation sponsors, invests in or provides financing, which
may be in connection with the sale of assets, to a variety of
investment vehicles that hold loans, real estate, debt securities
or other financial instruments and are designed to provide the
desired investment profile to investors or the Corporation. At
December 31, 2015 and 2014, the Corporation’s consolidated
investment vehicles had total assets of $397 million and $1.1
billion. The Corporation also held investments in unconsolidated
vehicles with total assets of $14.7 billion and $11.2 billion at
December 31, 2015 and 2014. The Corporation’s maximum loss
exposure associated with both consolidated and unconsolidated
investment vehicles totaled $5.1 billion at both December 31,
2015 and 2014 comprised primarily of on-balance sheet assets
less non-recourse liabilities.
The Corporation transferred servicing advance receivables to
independent third parties in connection with the sale of MSRs.
Portions of the receivables were transferred into unconsolidated
securitization trusts. The Corporation retained senior interests in
such receivables with a maximum loss exposure and funding
obligation of $150 million and $660 million, including a funded
balance of $122 million and $431 million at December 31, 2015
and 2014, which were classified in other debt securities carried
at fair value.
Leveraged Lease Trusts
The Corporation’s net investment in consolidated leveraged lease
trusts totaled $2.8 billion and $3.3 billion at December 31, 2015
and 2014. The trusts hold long-lived equipment such as rail cars,
power generation and distribution equipment, and commercial
aircraft. The Corporation structures the trusts and holds a
significant residual interest. The net investment represents the
Corporation’s maximum loss exposure to the trusts in the unlikely
event that the leveraged lease investments become worthless.
Debt issued by the leveraged lease trusts is non-recourse to the
Corporation.
Real Estate Vehicles
The Corporation held investments in unconsolidated real estate
vehicles with total assets of $6.6 billion and $6.2 billion at
December 31, 2015 and 2014, which primarily consisted of
investments in unconsolidated limited partnerships that construct,
own and operate affordable rental housing and commercial real
estate projects. An unrelated third party is typically the general
partner and has control over the significant activities of the
partnership. The Corporation earns a return primarily through the
receipt of tax credits allocated to the real estate projects. The
Corporation’s risk of loss is mitigated by policies requiring that the
project qualify for the expected tax credits prior to making its
investment. The Corporation may from time to time be asked to
invest additional amounts to support a troubled project. Such
additional investments have not been and are not expected to be
significant.