[BANK OF AMERICA LOGO APPEARS HERE]
$1,500,000,000
5 7/8% Senior Notes, due 2009
This global prospectus supplement and the attached prospectus describe the
$1,500,000,000 BankAmerica Corporation 5 7/8% Senior Notes, due 2009. We will
pay interest on the notes on August 15 and February 15 of each year with the
first interest payment on August 15, 1999. The notes will mature on February
15, 2009 and normally are not redeemable prior to maturity.
The notes are unsecured and rank equally with all of our other unsecured senior
indebtedness. The notes will be issued only in registered form in denominations
of $1,000.
Application has been made to list the notes on the Luxembourg Stock Exchange.
We do not intend to apply for listing of the notes on any other securities
exchange.
- --------------------------------------------------------------------------------
The notes are not savings accounts, deposits or other obligations of a bank.
The notes are not guaranteed by any bank and are not insured by the Federal
Deposit Insurance Corporation or any other governmental agency.
Neither the Securities and Exchange Commission, any state securities commission
nor the Commissioner of Insurance of the State of North Carolina has approved
or disapproved of these notes or passed upon the accuracy or adequacy of this
global prospectus supplement or the attached prospectus. Any representation to
the contrary is a criminal offense.
- --------------------------------------------------------------------------------
Per Note Total
------------ ---------------
Public Offering Price (1) .................... 99.319% $1,489,785,000
Underwriting Discount ........................ .65% 9,750,000
------ --------------
Proceeds to BankAmerica Corporation (Before
Expenses) (1) .............................. 98.669% $1,480,035,000
---------
(1) Purchasers will be required to pay accrued interest from February 8,
1999 if settlement occurs after that date.
The notes will be delivered in book-entry form only through The Depository
Trust Company, Cedel Bank, societe anonyme, and Morgan Guaranty Trust Company
of New York, Brussels office as operator of the Euroclear System on or about
February 8, 1999, against payment in immediately available funds.
NationsBanc Montgomery Securities LLC
Bear, Stearns & Co. Inc.
Lehman Brothers
Merrill Lynch & Co.
Salomon Smith Barney
Blaylock & Partners, L.P.
Interstate/Johnson Lane
Corporation
Utendahl Capital Partners, L.P.
The Williams Capital Group, L.P.
---------------
Global Prospectus Supplement to Prospectus dated May 21, 1998
February 2, 1999.
TABLE OF CONTENTS
Page
Global Prospectus Supplement -----
Additional Information ........................ S-2
About this Global Prospectus Supplement ....... S-3
Description of the Notes ...................... S-3
BankAmerica Corporation ....................... S-3
General ..................................... S-3
Business Segment Operations ................. S-4
Acquisitions and Sales ...................... S-5
Recent Financial Information .................. S-5
Capitalization ................................ S-6
Ratios of Earnings to Fixed Charges ........... S-6
Selected Financial Data ....................... S-7
Listing of the Notes and Related Matters ...... S-8
Registration and Settlement ................... S-8
Same Day Settlement and Payment ............. S-8
Book-Entry System ........................... S-8
Notices ..................................... S-9
Paying Agent, Security Registrar and Transfer
Agent ..................................... S-9
Payment of Principal and Interest ........... S-9
Payment of Additional Amounts ............... S-9
Redemption for Tax Reasons .................. S-10
Certain United States Federal Income Tax
Considerations .............................. S-11
United States Persons ....................... S-11
Non-United States Persons ................... S-11
Backup Withholding and Information
Reporting ................................. S-12
Underwriting .................................. S-13
Prospectus
Incorporation of Certain Documents by
Reference ................................... 2
Available Information ......................... 2
NationsBank Corporation ....................... 3
General ................................... 3
Operations ................................ 3
Government Supervision and Regulation ..... 4
Page
-----
General ................................... 4
Capital and Operational Requirements ...... 5
Distributions ............................. 6
Source of Strength ........................ 6
Use of Proceeds ............................... 6
Ratios of Earnings to Fixed Charges ........... 7
Plan of Distribution .......................... 7
Description of Debt Securities ................ 9
General ..................................... 9
Conversion .................................. 11
Exchange, Registration and Transfer ......... 11
Payment and Paying Agents ................... 11
Subordination ............................... 12
Sale or Issuance of Capital Stock of Banks .. 13
Waiver of Covenants ......................... 13
Modification of the Indentures .............. 13
Meetings and Action by Securityholders ...... 14
Defaults and Rights of Acceleration ......... 14
Collection of Indebtedness, etc. ............ 14
Notices ..................................... 15
Concerning the Trustees ..................... 15
Description of Warrants ....................... 15
General ..................................... 16
Modifications ............................... 16
Enforceability of Rights of Warrantholders;
Governing Law ............................. 17
Unsecured Obligations of the Corporation .... 17
Description of Units .......................... 17
Registration and Settlement ................... 17
DTC ......................................... 17
Cedel Bank and Euroclear .................... 19
Legal Opinions ................................ 21
Experts ....................................... 21
ADDITIONAL INFORMATION
Our mailing address and telephone number are:
BankAmerica Corporation
100 North Tryon Street
Charlotte, North Carolina 28255
(704) 386-5000
If you want to call the Securities and Exchange Commission directly, you
may obtain information on the operation of the public reference room by calling
the SEC at 1-800-SEC-0330.
S-2
ABOUT THIS GLOBAL PROSPECTUS SUPPLEMENT
This global prospectus supplement describes the specific terms of the
notes and supplements the description of the Debt Securities included in the
attached prospectus. In making your evaluation of the notes, you should rely
only on the information included or incorporated by reference in this global
prospectus supplement and the attached prospectus. If information in this
global prospectus supplement is inconsistent with the attached prospectus, this
global prospectus supplement will supersede the information in the attached
prospectus.
This global prospectus supplement and the attached prospectus do not
constitute an offer to sell or the solicitation of an offer to buy the notes in
any jurisdiction in which such offer or solicitation is unlawful.
Capitalized terms used, but not defined in this global prospectus
supplement, are defined in the attached prospectus.
DESCRIPTION OF THE NOTES
You should read the following description of the 5 7/8% Senior Notes, due
2009 along with the "Description of Debt Securities" in the attached
prospectus.
The notes are direct obligations of BankAmerica Corporation. Initially,
$1,500,000,000 of the notes will be issued under the Senior Indenture as a
single series of Senior Debt Securities as described in the attached
prospectus. The notes will begin to accrue interest on February 8, 1999 at the
annual rate of 5 7/8%.
Interest will be payable semiannually in arrears on the interest payment
dates shown below. Those payments will be made to holders of the notes on the
designated record date for each interest payment date.
Interest Payment
Date Record Date
----------------- --------------------
August 15 Previous July 31
February 15 Previous January 31
If the maturity date or an interest payment date for the notes falls on a
day that is not a Business Day, that payment will be made on the next Business
Day as if it were the date that payment was due and no interest will accrue
from and after the original payment date. The term "Business Day" means any
weekday that is not a legal holiday in New York, New York or Charlotte, North
Carolina and is not a day on which banking institutions in those cities are
authorized or required by law or regulation to be closed. Initially, we will
make principal and interest payments at the office of The Bank of New York, 101
Barclay Street, New York, New York 10286, who is authenticating and paying
agent, registrar and transfer agent for the notes.
The notes will mature on February 15, 2009 and normally are not redeemable
prior to maturity. The notes are not subject to any sinking fund. The Senior
Indenture does not limit the amount of Senior Indebtedness or other obligations
which we may issue.
The Senior Indenture permits us to later increase the amount of this
series of notes without notice by selling additional notes that have the same
terms as the notes offered hereby. Those notes will be treated, for all
purposes, as equal to the notes offered hereby (except that any new notes will
not begin to bear interest until issued).
BANKAMERICA CORPORATION
General
BankAmerica Corporation (the "Corporation") is the successor issuer to
NationsBank Corporation ("NationsBank"). On September 25, 1998, NationsBank was
reincorporated from North Carolina to Delaware. On September 30, 1998,
BankAmerica Corporation, a Delaware corporation ("BA"), was merged with and
into NationsBank, with NationsBank as the surviving corporation in the merger.
Upon completion of
S-3
the merger, NationsBank changed its name to "BankAmerica Corporation." After
the merger, we announced that we will operate under the "Bank of America" name.
The Corporation is a multi-bank holding company registered under the Bank
Holding Company Act of 1956. Our principal assets are the shares of stock of
our subsidiaries. Through our banking subsidiaries and our nonbanking
subsidiaries, we provide a diverse range of banking and nonbanking financial
services and products, primarily throughout the Mid-Atlantic (Maryland,
Virginia and the District of Columbia), Midwest (Illinois, Iowa, Kansas and
Missouri), Southeast (Florida, Georgia, North Carolina, South Carolina and
Tennessee), Southwest (Arizona, Arkansas, New Mexico, Oklahoma and Texas),
Northwest (Alaska, Oregon and Washington) and West (California, Idaho and
Nevada) regions of the U.S. and in selected international markets.
The Corporation and its subsidiaries are subject to supervision by various
U.S. federal and state banking and other regulatory authorities.
Business Segment Operations
The Corporation provides financial services and products through its
subsidiaries and reports its results through four business segments: (1)
Consumer Banking, (2) Commercial Banking, (3) Global Corporate and Investment
Banking and (4) Principal Investing and Wealth Management.
Our Consumer Banking segment provides comprehensive retail banking
services to individuals and small businesses through multiple delivery
channels, including approximately 4,800 banking centers and 14,000 automated
teller machines. These banking centers and automated teller machines are
located throughout our franchise and serve 30 million households in 22 states
and the District of Columbia. This segment also provides specialized services
such as the origination and servicing of residential mortgage loans, issuance
and servicing of credit cards, direct banking via telephone and personal
computer, student lending and certain insurance services. The consumer finance
component provides personal, mortgage, home equity and automobile loans to
consumers, retail finance programs to dealers and lease financing to purchasers
of new and used cars.
Our Commercial Banking segment provides a wide range of commercial banking
services for businesses with annual revenues of up to $500 million. Services
provided include commercial lending, treasury and cash management services,
asset-backed lending, leasing and factoring. Also included in this segment are
our commercial finance operations which provide activities such as equipment
loans and leases, loans for debt restructuring, mergers and working capital,
real estate and health care financing and inventory financing to manufacturers,
distributors and dealers.
Our Global Corporate and Investment Banking segment provides a wide range
of financial and investment banking products such as capital-raising products,
trade finance, treasury management, investment banking, capital markets and
financial advisory services to domestic and international corporations,
financial institutions and government entities. Clients are supported through
offices in 37 countries in four distinct regions: U.S. and Canada; Asia;
Europe, Middle East and Africa; and Latin America. Products and services
provided include loan origination, cash management, foreign exchange, leasing,
leveraged finance, project finance, real estate, risk management, senior bank
debt, structured finance, and trade services. Through a separate subsidiary,
NationsBanc Montgomery Securities LLC, Global Corporate and Investment Banking,
is a primary dealer of U.S. Government Securities, underwrites and trades
municipal bonds, and underwrites, distributes and makes markets in high-grade
and high-yield debt securities and equity securities. Asset-backed
securitization, commercial paper distributions, debt and equity securities
research, loan syndications, mergers and acquisitions consulting and private
placements are also provided through NationsBanc Montgomery Securities LLC.
Additionally, our Global Corporate and Investment Banking segment is a market
maker in derivative products, including swap agreements, option contracts,
forward settlement contracts, financial futures and other derivative products
in certain interest rate, foreign exchange, commodity and equity markets. In
support of these activities, Global Corporate and Investment Banking takes
positions in securities to support client demands and trades for its own
account and for the accounts of its affiliates.
S-4
Our Principal Investing and Wealth Management segment includes the Private
Bank which provides asset management, banking and trust services for high net
worth clients both in the U.S. and internationally. The Wealth Management arm
of this segment provides full service and discount brokerage, investment
advisory and investment management, as well as advisory services for our own
family of mutual funds. The Principal Investing area includes direct equity
investments in businesses and investments in general partnership funds.
Acquisitions and Sales
As part of our operations, we regularly evaluate the potential acquisition
of, and hold discussions with, various financial institutions and other
businesses that are eligible for bank holding company ownership or control. In
addition, we regularly analyze the values of, and submit bids for, the
acquisition of customer-based funds and other liabilities and assets of
suitable financial institutions and other businesses. We also regularly
consider the potential sale of certain of our assets, branches, subsidiaries or
lines of business. As a general rule, we publicly announce any material
acquisitions or sales when a definitive agreement has been reached.
RECENT FINANCIAL INFORMATION
For the fourth quarter of 1998, our net income was $1.16 billion, or $.67
per common share, compared to $1.46 billion, or $.84 per common share, for the
fourth quarter of 1997. Excluding the impact of a $441 million after-tax
merger-related charge, operating net income for the quarter was $1.60 billion,
or $.92 per common share, compared to $1.68 billion, or $.96 per common share,
for the same period in 1997.
We had net income of $5.17 billion in 1998 compared to $6.54 billion in
1997. Earnings per common share were $2.97 in 1998 compared to $3.71 in 1997.
Excluding the impact of a $1.32 billion after-tax merger-related charge, we had
operating net income of $6.49 billion in 1998 compared to $6.81 billion in
1997.
Taxable-equivalent net interest income declined less than 1% to $18.46
billion in 1998 compared to $18.59 billion in 1997. The net interest yield was
3.69% in 1998 compared to 4.00% in 1997.
Net income for 1998 included gains on sales of securities of $1.02 billion
compared to $271 million in 1997.
Noninterest income rose 4% to $12.19 billion compared to $11.76 billion in
1997.
Noninterest expense increased 6% to $18.74 billion compared to $17.63
billion in 1997.
The provision for credit losses was $2.92 billion in 1998 compared to
$1.90 billion in 1997. Net charge-offs rose to $2.47 billion in 1998, or .71%
of average net loans and leases, from $1.85 billion, or .54%, a year earlier.
Nonperforming assets were $2.76 billion, or .77% of net loans, leases and
foreclosed properties, on December 31, 1998, compared to $2.42 billion, or
.71%, a year earlier. The allowance for credit losses totaled $7.12 billion on
December 31, 1998, equal to 287% of nonperforming loans and 1.99% of net loans
and leases. The allowance was $6.78 billion, or 321% of nonperforming loans and
1.98% of net loans and leases, a year earlier.
Total shareholders' equity was $45.9 billion at December 31, 1998, or
7.44% of period-end assets, compared to $44.6 billion, or 7.81%, at December
31, 1997. At December 31, 1998, the Corporation's Tier 1 and total risk-based
capital ratios were 7.06% and 10.94%, respectively. The leverage ratio was
6.22%.
S-5
CAPITALIZATION
The following table sets forth our actual capitalization as of September
30, 1998 and after completion of our merger with BA as adjusted for (1) the
issuance of the notes; and (2) the issuance and the maturity of certain of the
Corporation's and its subsidiaries' notes during the period beginning October
1, 1998 through the date of this global prospectus supplement.
BankAmerica As
Actual Adjusted
------------- -----------
(Amounts in millions)
LONG-TERM DEBT:
Senior debt
BankAmerica Corporation .................................... $18,381 $ 17,517
5 7/8% Senior Notes, due 2009 .............................. -- 1,490
Subsidiaries (1) ........................................... 12,180 12,610
------- --------
Total senior debt ......................................... 30,561 31,617
------- --------
Subordinated debt
BankAmerica Corporation .................................... 15,860 15,966
Subsidiaries (1) ........................................... 642 639
------- --------
Total subordinated debt ................................... 16,502 16,605
------- --------
Total long-term debt ...................................... 47,063 48,222
------- --------
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Notes (2) .............................. 4,918 4,918
SHAREHOLDERS' EQUITY:
Preferred stock, authorized -- 100,000,000 shares; issued and
outstanding -- 1,967,245 shares ............................ 84 84
Common stock, authorized -- 5,000,000,000 shares; issued and
outstanding -- 1,742,037,974 shares ........................ 15,939 15,939
Retained earnings ........................................... 30,615 30,615
Accumulated other comprehensive income ...................... 784 784
Other ....................................................... (115) (115)
------- --------
Total shareholders' equity ................................ 47,307 47,307
------- --------
$99,288 $100,447
======= ========
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(1) These obligations are direct obligations of certain subsidiaries of the
Corporation and, as such, constitute claims against such subsidiaries
prior to the Corporation's equity interest therein.
(2) The line item "Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Notes" reflects the issuance of $4,965 million
aggregate liquidation amount of preferred undivided beneficial interests
in the assets of 13 wholly owned grantor trusts. The sole assets of the
trusts are junior subordinated notes of the Corporation.
As of September 30, 1998, we had $3.8 billion of commercial paper and
other short-term notes payable outstanding. To support our commercial paper
program, we have commercial paper backup lines of credit totaling $1.15 billion
of which $669 million expires in October 1999 and $479 million expires in
October 2002. In addition, we have a $1.56 billion line of credit which expires
in May 2001. At September 30, 1998, there were no amounts outstanding under
these credit facilities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
each of the years in the five-year period ended December 31, 1997 and for the
nine months ended September 30, 1998. Each of these ratios reflects our merger
with BA.
Year Ended
December 31, Nine Months
-------------------------------------------- Ended
1993 1994 1995 1996 1997 September 30, 1998
-------- -------- -------- -------- -------- -------------------
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits ........ 3.0 2.4 2.3 2.3 2.2 1.9
Including interest on deposits ........ 1.7 1.6 1.5 1.6 1.6 1.4
S-6
SELECTED FINANCIAL DATA
The following selected financial data for the Corporation as of December
31, 1996 and 1997, and for each of the years in the three-year period ended
December 31, 1997 are derived from financial statements of the Corporation
audited by PricewaterhouseCoopers LLP, independent accountants, and included in
the Corporation's Current Report on Form 8-K filed November 16, 1998. The
financial data for the nine months ended September 30, 1997 and 1998 are
derived from unaudited financial statements. The unaudited financial statements
include all adjustments, consisting only of normal recurring accruals, that the
Corporation considers necessary for a fair presentation of its financial
position and the results of its operations as of such dates and for such
periods. Results for the nine months ended September 30, 1998 are not
necessarily indicative of the results that might be expected for any other
interim period or for the year as a whole. Unless otherwise stated, the
selected financial data reflects our merger with BA.
Nine Months
Ended
Year Ended December 31, September 30,
-------------------------------------------- -----------------------------
1995 1996 1997 1997 1998
-------------- -------------- -------------- -------------- --------------
(Amounts in millions except per-share information)
Income statement:
Interest income ................................. $ 32,158 $ 33,636 $ 37,333 $ 27,799 $ 28,950
Interest expense ................................ 16,369 16,682 18,901 13,925 15,261
Net interest income ............................. 15,789 16,954 18,432 13,874 13,689
Provision for credit losses ..................... 945 1,645 1,904 1,406 2,410
Gains on sales of securities .................... 68 147 271 160 613
Noninterest income .............................. 8,132 9,604 11,756 8,531 9,534
Foreclosed properties expense ................... 63 45 20 24 42
Merger-related charge ........................... -- 398 374 72 1,195
Other noninterest expense ....................... 14,604 15,306 17,605 12,865 14,012
Income before taxes ............................. 8,377 9,311 10,556 8,198 6,177
Income tax expense .............................. 3,230 3,498 4,014 3,115 2,174
Net income ...................................... 5,147 5,813 6,542 5,083 4,003
Net income available to common shareholders ..... 4,896 5,611 6,431 4,988 3,979
Average common shares issued and outstanding
(in thousands) ................................ 1,613,404 1,638,382 1,733,194 1,736,460 1,732,297
Per common share:
Earnings ........................................ $ 3.03 $ 3.42 $ 3.71 $ 2.87 $ 2.30
Diluted earnings ................................ 2.98 3.36 3.61 2.80 2.24
Cash dividends paid ............................. 1.04 1.20 1.37 .99 1.14
December 31, September 30,
--------------------------- ---------------------------
1996 1997 1997 1998
------------- ------------- ------------- -------------
(Amounts in millions except ratios)
Balance sheet:
Total loans, leases and factored accounts receivable, net of unearned
income ............................................................ $ 317,709 $ 342,140 $ 336,293 $ 351,982
Total assets ........................................................ 477,702 570,983 543,414 594,673
Total deposits ...................................................... 309,100 346,297 335,574 345,756
Long-term debt ...................................................... 40,041 42,887 42,340 47,552
Total shareholders' equity .......................................... 37,793 44,584 43,884 47,307
Allowance for credit losses as a percentage of loans, leases and
factored accounts receivable, net of unearned income .............. 1.99% 1.98% 2.01% 2.05%
Total equity to total assets ........................................ 7.91 7.81 8.08 7.96
Risk-based capital ratios (1):
Tier 1 .............................................................. 7.76 6.50 7.00 7.29
Total ............................................................... 12.66 10.89 11.56 11.25
Leverage capital ratio .............................................. 7.09 5.57 6.16 6.64
- ---------
(1) Capital ratios for December 31, 1996 and 1997 and September 30, 1997
included herein have not been restated to reflect NationsBank's mergers
with BA and with Barnett Banks, Inc. Under regulatory guidelines, BA and
Barnett Banks, Inc. were considered well capitalized on the dates of such
mergers.
S-7
LISTING OF THE NOTES AND RELATED MATTERS
We have made an application to list the notes on the Luxembourg Stock
Exchange. However, there can be no assurance that the notes will be accepted
for listing. We do not intend to list the notes on any other securities
exchange. Prior to listing, a legal notice relating to the issuance of the
notes, our Certificate of Incorporation and Bylaws, the Indenture and the
Underwriting Agreement will be deposited with the Chief Registrar of the
District Court of Luxembourg, where those documents may be inspected and copies
thereof obtained upon request.
As long as the notes are listed on the Luxembourg Stock Exchange, copies
of our Certificate of Incorporation and Bylaws, the Indenture and the
Underwriting Agreement and copies of the documents referred to under "Available
Information" in the attached prospectus will be available at the offices of
Banque Generale du Luxembourg (the "Listing Agent") in the City of Luxembourg.
In addition, 1996 and 1997 NationsBank annual financial statements and our
quarterly and annual financial statements commencing with the September 30,
1998 statements will be available at the offices of the Listing Agent in the
City of Luxembourg.
There has been no material adverse change in our consolidated financial
condition since September 30, 1998.
We are not a party to any legal proceeding which, if determined adversely,
would materially and adversely affect our condition or operations or would
materially and adversely affect our ability to perform our obligations under
the notes or the Indenture.
REGISTRATION AND SETTLEMENT
Same Day Settlement and Payment
The underwriters purchasing the notes from us will settle the notes in
immediately available funds. As long as the notes are represented by Global
Notes, we will make all principal and interest payments in immediately
available funds.
Secondary trading in notes and debentures of corporate issuers is
generally settled in clearing house or next day funds. In contrast, as long as
the notes are represented by Global Notes registered in the name of DTC or its
nominee, the notes will trade in DTC's Same-Day Funds Settlement System. DTC
requires secondary market trading activity in the notes to settle in
immediately available funds. This requirement may affect trading activity in
the notes. Settlements involving Cedel Bank or Euroclear and a DTC Participant
will be dated the following business day. See "REGISTRATION AND SETTLEMENT --
Cedel Bank and Euroclear" in the prospectus.
Book-Entry System
The notes will be issued in book-entry form only. This means that we will
not issue actual notes or certificates to each holder. Instead, the notes will
be in the form of a Global Note held in the name of DTC. In order to own a
beneficial interest in a note, you must be an institution that has an account
with DTC or have a direct or individual account with such an institution. Cedel
Bank and Euroclear will hold omnibus positions on behalf of Cedel Bank
Participants and Euroclear Participants, respectively, through customers'
securities accounts in Cedel Bank's and Euroclear's names, respectively, on the
books of their respective depositories, which, in turn, will hold such
positions on the books of DTC.
Notes will not be issued in certificated form unless:
o DTC notifies us that it is unwilling or unable to continue as depository
or it otherwise ceases to be a qualified clearing agency and we do not
appoint a successor depository; or
o we make a decision to permit notes to be issued in certificated form and
notify the Trustee of that decision.
No service charge will be made for any registration of transfer or
exchange of notes issued in certificated form, but we may require payment of a
sum sufficient to cover any related tax or other governmental
S-8
charge. If the notes are listed on the Luxembourg Stock Exchange and are
subsequently issued in certificated form, we will appoint a paying and transfer
agent in Luxembourg. Any notes in certificated form may be presented for
payment and/or transfer at the paying and transfer agent's office while they
are outstanding. In addition, upon redemption of the notes, any notes in
certificated form and listed on the Luxembourg Stock Exchange may be presented
for payment at the offices of the Luxembourg paying and transfer agent for up
to two years after the date of redemption of the notes.
Notices
Any notices required to be given to the holders of the notes will be given
to DTC and, if the notes are listed on the Luxembourg Stock Exchange, by
publication in a daily newspaper in Luxembourg which is expected to be the
Luxemburger Wort. If notes in certificated form are issued, notices to holders
of the notes will also be given by mail to the addresses of the holders as they
appear on the security register. Until any notes are issued in certificated
form, there may be substituted for publication in the newspaper the delivery of
the relevant notice to Euroclear and Cedel Bank for communication to their
participants, except that, as long as the notes are listed on the Luxembourg
Stock Exchange and the rules of the Luxembourg Stock Exchange so require,
notices will also be published in the Luxemburger Wort. Any notice published in
the Luxemburger Wort shall be deemed to have been given on the date of
publication or, if published more than once, on the date of the first
publication. Any notice to Euroclear and Cedel Bank shall be deemed to have
been given to their participants on the seventh day after the day on which the
notice was given to Euroclear and Cedel Bank. If approved for listing, as long
as the notes are listed on the Luxembourg Stock Exchange, any change in the
Luxembourg paying and transfer agent will be published in the Luxemburger Wort.
Paying Agent, Security Registrar and Transfer Agent
Until the notes are paid, we will maintain a paying agent, security
registrar and transfer agent for the notes. Initially, The Bank of New York
will serve in each of these capacities. The Luxembourg paying and transfer
agent that is expected to be appointed if the notes are listed on the
Luxembourg Stock Exchange is: Banque Generale du Luxembourg, 14 rue Aldringen,
L-2951 Luxembourg.
Payment of Principal and Interest
Principal of, premium, if any, and interest on notes in book-entry form
are paid in accordance with the arrangements then in place between the paying
agent and DTC or its nominee, as holder. Interest on notes in certificated form
generally is paid by check mailed to the holders of the notes on the applicable
record date at the address appearing in our records. Principal, premium, if
any, and interest payable at the maturity date of a note in certificated form
are paid by wire transfer of immediately available funds upon surrender of the
note at the corporate trust office of the applicable Trustee or paying agent.
Payment of Additional Amounts
We will, subject to the exceptions and limitations set forth below, pay as
additional interest on the notes those additional amounts ("Additional
Amounts") as may be necessary in order that our net payment of the principal of
and interest on the notes to holders who are Non-United States Persons (as such
term is defined below), after deduction for any present or future tax,
assessment or governmental charge of the United States, or a political
subdivision or authority thereof or therein, imposed by withholding with
respect to the payment, will not be less than the amount provided for in the
notes to be then due and payable. The obligation to pay Additional Amounts
shall not apply to:
(1) any tax, assessment or other governmental charge which would not have
been so imposed but for:
(a) the existence of any present or former connection between such
holder (or between a fiduciary, settlor, beneficiary, member or
stockholder of, or a person holding a power over, such holder, if such
holder is an estate, trust, partnership or corporation) and the United
States,
S-9
including, without limitation, such holder (or such fiduciary, settlor,
beneficiary, member, stockholder or person holding a power) being or
having been a citizen or resident or treated as a resident thereof or
being or having been engaged in a trade or business therein or being or
having been present therein or having or having had a permanent
establishment therein;
(b) the holder's present or former status as a personal holding
company, foreign personal holding company, passive foreign investment
company, private foundation or other tax-exempt entity or controlled
foreign corporation for United States tax purposes or a corporation
which accumulates earnings to avoid United States federal income tax; or
(c) the holder's status as a bank extending credit pursuant to a loan
agreement entered into in the ordinary course of business;
(2) any tax, assessment or governmental charge that would not have been
imposed or withheld but for the failure of the holder to comply with
certification, identification or information reporting requirements under
United States income tax laws, without regard to any tax treaty, with
respect to the payment, concerning the nationality, residence, identity or
connection with the United States of the holder or a beneficial owner of
the notes, if such compliance is required by United States income tax laws,
without regard to any tax treaty, as a precondition to relief or exemption
from such tax, assessment or governmental charge;
(3) any tax, assessment or governmental charge that would not have been
so imposed or withheld but for the presentation by the holder of the notes
for payment on a date more than 30 days after the date on which such
payment became due and payable or the date on which payment thereof is duly
provided for, whichever occurs later;
(4) any estate, inheritance, gift, sales, transfer, excise, wealth or
personal property tax or any similar tax, assessment or governmental
charge;
(5) any tax, assessment or governmental charge which is payable otherwise
than by withholding by the Corporation or the Trustee from the payment of
the principal of or interest on the notes;
(6) any tax, assessment or governmental charge required to be withheld
from the payment of principal of or interest on the notes, if such payment
can be made without such withholding or any liability on the part of the
Corporation;
(7) any tax, assessment or other governmental charge imposed on interest
received by a person holding, actually or constructively, 10% or more of
the total combined voting power of all classes of our stock entitled to
vote; or
(8) any combination of items (1), (2), (3), (4), (5), (6) or (7);
nor shall Additional Amounts be paid with respect to any payment of the
principal of or interest on the notes to a person other than the sole
beneficial owner of such payment or that is a partnership or fiduciary to the
extent such beneficial owner, member of such partnership or beneficiary or
settlor with respect to such fiduciary would not have been entitled to the
payment of Additional Amounts had such beneficial owner, member, beneficiary or
settlor held its interest in the notes directly.
Redemption for Tax Reasons
The notes may be redeemed at our option in whole, but not in part, at any
time on giving not less than 30 nor more than 60 days' notice to the Trustee
and the holders of the notes, if the Corporation has or will become obliged to
pay Additional Amounts as a result of any change in, or amendment to, the laws
or regulations of the United States or any political subdivision or any
authority thereof or therein having power to tax, or any change in the
application or official interpretation of such laws or regulations, which
change or amendment becomes effective on or after the date of this global
prospectus supplement.
Prior to the publication of any notice of redemption we will deliver to
the Trustee a certificate signed by the Chief Financial Officer or a Senior
Vice President of the Corporation stating that we are entitled to effect such
redemption and setting forth a statement of facts showing that the conditions
precedent to the right to redeem have occurred.
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Notes redeemed by us will be redeemed at 100% of their principal amount
together with interest accrued to (but excluding) the date of redemption.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a brief summary of certain United States federal income
tax consequences associated with the acquisition, ownership and disposition of
the notes applicable to initial purchasers of notes. The summary is based upon
the relevant laws and rules which are now in effect and as they are currently
interpreted. However, these laws and rules may be changed at any time, possibly
with retroactive effect. This discussion does not deal with the federal tax
consequences applicable to all categories of investors. In particular, the
discussion does not deal with those of you who may be in special tax
situations, such as dealers in securities, insurance companies, financial
institutions or tax-exempt entities. It does not include any description of the
tax laws of any state or local governments or any foreign government that may
be applicable to the notes or to you as holders of the notes. In this global
prospectus supplement, the term "United States person" means a citizen or
resident of the United States, a corporation or a partnership (or other entity
treated as a corporation or partnership for federal income tax purposes,
including certain limited liability companies) created or organized under the
laws of the United States, an estate the income of which is subject to United
States federal income tax regardless of its source, or a trust for which one or
more United States persons have the authority to control all substantial
decisions and for which a court of the United States can exercise primary
supervision over the trust's administration. A special rule may apply under
which a trust which was in existence on August 20, 1996, and which was treated
as a United States person on that date, may elect to continue to be treated as
a United States person even though it is not the type of United States trust
referred to in the preceding sentence. "Non-United States person" means any
holder of the notes other than a "United States person."
Prospective purchasers of the notes are urged to consult their own tax
advisors concerning the United States Federal Income Tax consequences of
acquiring, owning and disposing of the notes as well as the application of
state, local and foreign income and other tax laws.
United States Persons
Interest payable on the notes will be includable as ordinary income in the
income of a United States person as received or accrued, in accordance with
such holder's regular method of accounting. If a note is sold or otherwise
disposed of, a United States person generally will recognize gain or loss equal
to the difference between the amount realized on the disposition (except to the
extent attributable to accrued but unpaid interest) and such holder's tax basis
in the note. Such gain or loss will generally be capital gain or loss.
Non-United States Persons
Principal (and premium, if any) and interest payments, including any
original issue discount ("OID"), that you receive from us or our agent
generally will not be subject to United States federal withholding tax.
However, interest, including any OID, may be subject to a 30% withholding tax
(or less under any applicable treaty) if (1) you actually or constructively
owned 10% or more of the total combined voting power of all classes of our
stock entitled to vote, (2) you are a controlled foreign corporation for United
States tax purposes that is related to us (directly or indirectly) through
stock ownership or (3) either (a) you do not certify to us or our agent, under
penalties of perjury, that you are a Non-United States person or do not provide
your name and address, or (b) a securities clearing organization, bank or other
financial institution that holds customer securities in the ordinary course of
its trade or business (a "financial institution") and holds the notes does not
certify to us or our agent under penalties of perjury that either it or a
financial institution has received a statement from you and furnishes us with a
copy of the statement.
If you are in a trade or business in the United States and interest,
including any OID, on a note is effectively connected with the conduct of your
trade or business, you may be subject to United States federal income tax on
that interest and any OID in the same manner as if you were a United States
person. If you are a foreign corporation, you may also be subject to a branch
profits tax equal to 30% of your effectively connected earnings and profits for
the taxable year, subject to certain adjustments. Instead of the certification
described in the preceding paragraph, if you have effectively connected
interest income
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you must provide the payer with a properly executed IRS Form 4224 to claim an
exemption from United States federal withholding tax.
New rules have been issued to consolidate and modify the current
certification requirements and means by which you may claim exemption from
United States federal income tax withholding and from backup withholding. These
rules apply to payments made after December 31, 1999 and provide certain
presumptions regarding your tax status if you do not provide appropriate
documentation to make this determination. You must provide certification that
complies with these new rules, where required, by the first payment date after
these rules become effective. In some circumstances, the new rules allow us to
continue to rely on certificates you provided us before January 1, 2000 for a
transitional period. If you are claiming benefits under an income tax treaty,
you may be required to obtain a taxpayer identification number and to certify
your eligibility under the applicable treaty's limitations on benefits articles
in order to comply with the new rules. Because these rules may apply
differently to different holders, you are urged to consult your own tax advisor
regarding the application of these rules to you.
You will not be subject to United States federal income tax or withholding
taxes on any capital gain or market discount you realize upon retirement or
disposition of a note if (1) the gain is not effectively connected with a
United States trade or business carried on by you, and (2) if you are an
individual, you are not present in the United States for 183 days or more in
the taxable year of the retirement or disposition.
Backup Withholding and Information Reporting
The payment of principal and interest and the accrual of OID, if any, are
generally subject to information reporting and possibly to "backup withholding"
at a rate of 31%. Information reporting means that the payment is required to
be reported to you and to the IRS. Backup withholding means that the payor is
required to collect and deposit 31% of your payment with the IRS as a tax
payment on your behalf.
If you are a United States person (other than a corporation or certain
exempt organization), you may be subject to backup withholding if you do not
supply an accurate taxpayer identification number and certify that your
taxpayer identification number is correct. You may also be subject to backup
withholding if the United States Secretary of the Treasury determines that you
have not reported all interest and dividend income required to be shown on your
federal income tax return or if you do not certify that you have not
underreported your interest and dividend income. If you are a Non-United States
person, backup withholding and information reporting will not apply to payments
made to you if you have provided required certification that you are a
Non-United States person as set forth above, or you otherwise establish an
exemption (provided that the payor does not have actual knowledge that you are
a United States person or that the conditions of any exemption are not in fact
satisfied).
Under current rules, which are effective for payments made through
December 31, 1999, payments of the proceeds from the sale of notes to or
through a foreign office of a broker or the foreign office of a custodian,
nominee or other dealer acting on your behalf generally will not be subject to
information reporting or backup withholding. However, if the broker, custodian,
nominee or other dealer is a United States person, a controlled foreign
corporation for United States tax purposes or a foreign person 50% or more of
whose gross income for certain periods is effectively connected with a United
States trade or business, information reporting generally will be required for
payments made to you unless the broker, custodian, nominee or other dealer has
documentation of your foreign status and has no actual knowledge to the
contrary (or you otherwise establish an exemption from information reporting).
Under the new rules referred to above, these payments will also not be
subject to information reporting or backup withholding, unless the broker,
custodian, nominee or other dealer is (1) a United States person, (2) the
government of the United States or the government of any State or political
subdivision of any State (or any agency or instrumentality of any of these
governmental units), (3) a controlled foreign corporation for United States tax
purposes, (4) a foreign partnership that is either engaged in a United States
trade or business or whose United States partners in the aggregate hold more
than 50% of the income or capital interest in the partnership, (5) a foreign
person 50% or more of whose gross income for a certain period is effectively
connected with a United States trade or business, or (6) a United States branch
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of a foreign bank or insurance company. If your broker falls into one of the
preceding categories, information reporting will generally be required for
payments made to you unless the broker has documentation of your foreign status
and the broker has no actual knowledge to the contrary (or you otherwise
establish an exemption from information reporting).
Payment of the proceeds from a sale of notes to or through the United
States office of a broker is subject to information reporting and backup
withholding, unless you certify as to your non-United States status or
otherwise establish an exemption from information reporting and backup
withholding.
Any amounts withheld from your payment under the backup withholding rules
would be refundable or allowable as a credit against your United States federal
income tax liability.
UNDERWRITING
We entered into an underwriting agreement on February 2, 1999 (the
"Underwriting Agreement") with the underwriters named below (the
"Underwriters"). In the Underwriting Agreement, we have agreed to sell to each
of the Underwriters and each of the Underwriters has agreed to purchase from us
the principal amount of the notes set forth opposite its name below at the
price set forth on the cover page of this global prospectus supplement.
Principal Amount
Underwriter of the Notes
--------------------------------------------- -----------------
NationsBanc Montgomery Securities LLC ..... $ 975,000,000
Bear, Stearns & Co. Inc. .................. 116,250,000
Lehman Brothers Inc. ...................... 116,250,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ...................... 116,250,000
Salomon Smith Barney Inc. ................. 116,250,000
Blaylock & Partners, L.P. ................. 15,000,000
Interstate/Johnson Lane Corporation ....... 15,000,000
Utendahl Capital Partners, L.P. ........... 15,000,000
The Williams Capital Group, L.P. .......... 15,000,000
--------------
Total .................................. $1,500,000,000
==============
The obligations of the Underwriters under the Underwriting Agreement,
including their agreement to purchase the notes from us, are several and not
joint. These obligations are also subject to the satisfaction of certain
conditions in the Underwriting Agreement. The Underwriters have agreed to
purchase all of the notes if any of them are purchased.
The notes will be offered simultaneously in the United States and abroad.
The Underwriters have informed us that they will initially offer the notes
to the public at the Public Offering Price set forth on the cover page of this
global prospectus supplement. The Underwriters may sell the notes to certain
dealers at the Public Offering Price, less a concession which will not exceed
.40% of the principal amount of the notes. The Underwriters and such dealers
may resell the notes to other dealers at a reallowance discount which will not
exceed .25% of the principal amount of the notes. After the initial offering of
the notes, these concessions and reallowance discounts may change. We expect to
receive 98.669% of the principal amount of the notes before our payment of
approximately $250,000 of expenses.
Each of the Underwriters has represented and agreed that it has not and
will not offer, sell or deliver any of the notes directly or indirectly, or
distribute this global prospectus supplement or the attached prospectus or any
other offering material relating to the notes, in or from any jurisdiction
except under circumstances that will result in compliance with the applicable
laws and regulations thereof and that will not impose any obligations on the
Corporation except as set forth in the Underwriting Agreement.
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In particular, each Underwriter has represented and agreed that:
(1) it has not offered or sold and will not offer or sell any notes to
persons in the United Kingdom prior to the expiration of the period of six
months from the issue date of the notes except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for the purpose of their businesses or
otherwise in circumstances which have not resulted and will not result in
an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995;
(2) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of
the notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 (as amended) or is a person to whom such document may otherwise
lawfully be issued or passed on; and
(3) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 with respect to anything done by it in relation
to any notes in, from or otherwise involving the United Kingdom.
We have agreed to indemnify the Underwriters and certain other persons
against certain liabilities, including liabilities under the Securities Act of
1933, as amended.
The notes are a new issue of securities and have no established trading
market. We have made an application to list the notes on the Luxembourg Stock
Exchange. However, there can be no assurance that the notes will be accepted
for listing. We do not intend to list the notes on any other securities
exchange. We have been informed by the Underwriters that they intend to
purchase and sell the notes in the secondary market from time to time. However,
the Underwriters are not obligated to do so and may discontinue making a market
for the notes at any time without giving us notice. There is no assurance that
there will be a secondary market for the notes.
In connection with the offering of the notes, the Underwriters may engage
in overallotment, stabilizing transactions and syndicate covering transactions
in accordance with Regulation M under the Securities Exchange Act of 1934, as
amended. Overallotment involves sales in excess of the offering size, which
create a short position for the Underwriters. Syndicate covering transactions
involve purchases of the notes in the open market after the distribution has
been completed in order to cover short positions. Stabilizing transactions and
syndicate covering transactions may cause the price of the notes to be higher
than it would otherwise be. Those activities, if commenced, may be discontinued
at any time.
NationsBanc Montgomery Securities LLC ("NMS") is our wholly owned
broker-dealer subsidiary. The offer and sale of any notes by NMS will comply
with the requirements of Rule 2720 of the Conduct Rules of the National
Association of Securities Dealers, Inc. regarding a member firm's underwriting
securities of an affiliate. As required by Rule 2720, any such offer and sale
will not be made to any discretionary account without the prior approval of the
customer.
Following the initial distribution of the notes, NMS or one of our other
affiliates may offer and sell the notes in the course of their business as a
broker-dealer and may act as principal, agent or remarketing agent. This global
prospectus supplement and the attached prospectus may be delivered in
connection with effecting such transactions. Any such sales will be made at
negotiated prices relating to prevailing market prices at the time of sale.
Each of the Underwriters or their affiliates provides or has provided
investment or commercial banking services to us from time to time in the
ordinary course of business.
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PROSPECTUS
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[NATIONSBANK (R) LOGO APPEARS HERE]
Debt Securities
Warrants
Units
---------------
NationsBank Corporation ("NationsBank" or the "Corporation") may offer
from time to time its unsecured debt securities, which may be either senior
(the "Senior Debt Securities") or subordinated (the "Subordinated Debt
Securities" and, together with the Senior Debt Securities, the "Debt
Securities"). The Senior Debt Securities will rank equally with all other
unsubordinated and unsecured indebtedness of the Corporation. The Subordinated
Debt Securities will be subordinate in right of payment to all existing and
future Senior Indebtedness (as defined herein) of the Corporation. NationsBank
also may issue and sell warrants to purchase Debt Securities ("Debt Warrants")
or to purchase or sell (i) securities of an entity unaffiliated with the
Corporation, a basket of such securities, an index or indices of securities or
any combination of the above, (ii) currencies or currency units or (iii)
commodities ("Universal Warrants", and together with Debt Warrants, the
"Warrants"), as set forth in the applicable Prospectus Supplement (as defined
below) on terms to be determined at the time of sale. The Corporation may
satisfy its obligations, if any, with respect to any Universal Warrants by
delivering underlying securities, currencies or commodities or, in the case of
underlying securities or commodities, the cash value thereof, as set forth in
the applicable Prospectus Supplement. Debt Securities and Warrants or any
combination thereof may be offered in the form of units ("Units"). Units may be
issued as Definitive Units or Book-Entry Units (each as defined herein). The
Debt Securities, Warrants and Units are collectively referred to herein as
"Securities".
NationsBank may sell up to $10,000,000,000 in aggregate initial offering
price of Securities (or the U.S. dollar equivalent thereof if any of the
Securities are denominated in a foreign currency or currency unit), which may
be offered, separately or together, in one or more series, in amounts, at
prices and on terms to be determined at the time of sale and set forth in an
accompanying supplement to this Prospectus (a "Prospectus Supplement").
Pursuant to the terms of the Registration Statement of which this Prospectus
constitutes a part, NationsBank may also offer and sell shares of its preferred
stock (the "Preferred Stock"), which may be represented by depositary shares
(the "Depositary Shares"), and shares of its common stock (the "Common Stock").
Any such Preferred Stock, Depositary Shares or Common Stock will be offered and
issued pursuant to the terms of a separate Prospectus contained in such
Registration Statement. The aggregate amount of Securities that may be offered
and sold pursuant hereto is subject to reduction as the result of the sale of
any Preferred Stock, Depositary Shares or Common Stock pursuant to such
separate Prospectus or at the Corporation's discretion.
The Securities may be sold for U.S. dollars, foreign denominated currency
or currency units; principal of and any interest on Debt Securities and cash
amounts payable with respect to Warrants or Units may likewise be payable in
U.S. dollars, foreign currencies or currency units, in each case, as the
Corporation specifically designates.The accompanying Prospectus Supplement will
set forth the specific terms of each series of Securities.
The Securities may be sold (i) through underwriting syndicates represented
by managing underwriters, or by underwriters without a syndicate, with such
underwriters to be designated at the time of sale; (ii) through agents
designated from time to time; or (iii) directly by the Corporation. The names
of any underwriters or agents of NationsBank involved in the sale or
remarketing of the Securities, the public offering price or purchase price and
any commissions or discounts will be set forth in the applicable Prospectus
Supplement or a pricing supplement thereto. Any such underwriters, agents or
remarketing agents may include NationsBanc Montgomery Securities LLC ("NMS"),
or other affiliates of the Corporation.
The net proceeds to the Corporation from such sale also will be set forth
in such Prospectus Supplement or pricing supplement.
Following the initial distribution of any such Securities, NMS or other
affiliates of the Corporation may offer and sell previously issued Securities
in the course of their business as a broker-dealer and may act as a principal
or agent in such transactions. This Prospectus and the accompanying Prospectus
Supplement may be used in connection with such transactions. Any such sales
will be made at negotiated prices relating to prevailing market prices at the
time of sale.
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
---------------
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR BANK DEPOSITS, ARE NOT OBLIGATIONS
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK, ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY AND INVOLVE INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH
CAROLINA (THE "COMMISSIONER") OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION, THE COMMISSIONER OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
The date of this Prospectus is May 21, 1998
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Corporation with the
Securities and Exchange Commission (the "Commission") pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), are
incorporated herein by reference:
(a) The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997 as filed March 13, 1998;
(b) The Corporation's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998 as filed May 15, 1998;
(c) The Corporation's Current Reports on Form 8-K filed January 14, 1998,
January 22, 1998, February 3, 1998, March 13, 1998, March 23, 1998, April
15, 1998, April 16, 1998, April 17, 1998 (as amended by Form 8-K/A-1 filed
April 24, 1998 and Form 8-K/A-2 filed May 18, 1998), May 6, 1998 and May
13, 1998; and
(d) The description of the Corporation's Common Stock contained in its
registration statement filed pursuant to Section 12 of the 1934 Act, as
modified by the Corporation's Current Report on Form 8-K filed on January
22, 1998.
All reports and any definitive proxy or information statements filed by
the Corporation with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the later of (i) the termination of the offering of the Securities offered
hereby or (ii) the date on which NMS or any other affiliate of the Corporation
ceases offering and selling previously issued Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Corporation will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated herein by reference (other
than exhibits to such documents which are not specifically incorporated by
reference in such documents). Written requests for such copies should be
directed to John E. Mack, Senior Vice President and Treasurer, NationsBank
Corporation, NationsBank Corporate Center, Corporate Treasury Division,
Charlotte, North Carolina 28255. Telephone requests may be directed to (704)
386-5972.
AVAILABLE INFORMATION
NationsBank is subject to the informational requirements of the 1934 Act
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the following public reference
facilities maintained by the Commission: 450 Fifth Street, N.W., Washington,
D.C. 20549; 7 World Trade Center, Suite 1300, New York, New York 10048; and the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511. Copies of such material may also be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, upon payment of prescribed rates. The Commission
maintains an Internet web site that contains reports, proxy and information
statements and other information regarding issuers who file electronically with
the Commission. The address of that site is http://www.sec.gov. In addition,
reports, proxy statements and other information concerning NationsBank may be
inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street,
New York, New York 10005 and at the offices of the Pacific Exchange Inc., 301
Pine Street, San Francisco, California 94104.
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
DESCRIBED HEREIN. SPECIFICALLY, THE UNDERWRITERS OR AGENTS SPECIFIED IN THE
RELEVANT PROSPECTUS SUPPLEMENT OR PRICING SUPPLEMENT MAY OVERALLOT
2
IN CONNECTION WITH THE OFFERING, AND MAY BID FOR, AND PURCHASE, THE SECURITIES
OR ANY SECURITIES THE PRICES OF WHICH MAY BE USED TO DETERMINE PAYMENTS ON THE
SECURITIES IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN
OF DISTRIBUTION."
NATIONSBANK CORPORATION
General
NationsBank is a North Carolina corporation and a multi-bank holding
company registered under the Bank Holding Company Act of 1956, as amended (the
"Act"), with its principal assets being the stock of its subsidiaries. Through
its banking subsidiaries (the "Banks") and various nonbanking subsidiaries, the
Corporation provides banking and certain nonbanking financial services and
products primarily throughout the Mid-Atlantic (Maryland, Virginia and the
District of Columbia), the Midwest (Illinois, Iowa, Kansas and Missouri), the
Southeast (Florida, Georgia, Kentucky, North Carolina, South Carolina and
Tennessee) and the Southwest (Arkansas, New Mexico, Oklahoma and Texas). The
principal executive offices of the Corporation are located at NationsBank
Corporate Center in Charlotte, North Carolina 28255. The Corporation's
telephone number is (704) 386-5000.
Operations
The Corporation provides a diversified range of banking and certain
nonbanking financial services and products through its various subsidiaries.
Management reports the results of the Corporation's operations through four
business segments: Consumer Banking, Middle Market, Asset Management, and
Corporate Finance.
The Consumer Banking segment provides comprehensive retail banking
services through multiple delivery channels including approximately 3,000
banking centers and 7,000 automated teller machines providing fully-automated,
24-hour cash dispensing and deposit services. These delivery channels are
located throughout the Corporation's franchise and serve 16 million households
in 16 states and the District of Columbia. In addition, this segment provides
specialized services such as the origination and servicing of residential
mortgage loans, issuance and service of credit cards, direct banking via
telephone and personal computer, student lending and certain insurance
services. The consumer finance component provides personal, mortgage, home
equity and automobile loans to consumers, retail finance programs to dealers
and lease financing to purchasers of new and used cars. Consumer Banking also
provides commercial banking services to companies and other commercial entities
with annual revenues of less than $10 million.
The Middle Market segment provides a broad array of commercial banking
services for companies and other commercial entities with revenues between $10
million and $250 million annually including: commercial lending, treasury and
cash management services, asset-backed lending, leasing and factoring. Also
included in this segment is NationsCredit Commercial Corporation, which
provides commercial financing activities including: equipment loans and leases,
loans for debt restructuring, mergers and working capital, real estate and
health care financing and inventory financing to manufacturers, distributors
and dealers.
The Asset Management segment includes businesses that provide full service
and discount brokerage, investment advisory, investment management and advisory
services for the Nations Funds family of mutual funds. Within the Asset
Management segment, the Private Client Group provides asset management, banking
and trust services for wealthy individuals, business owners and corporate
executives and the private foundations established by them.
Corporate Finance provides a broad array of banking and investment banking
products and services to domestic and international corporations, institutions
and other customers through its Capital Markets, Real Estate and Transaction
Products units. The Corporate Finance segment serves as a principal lender and
investor, as well as an advisor, and manages treasury and trade transactions
for clients and customers. Loan origination and syndication, asset-backed
lending, project finance and mergers and acquisitions consulting are
representative of the services provided. These services are provided through
various domestic and international offices. Through its Section 20 subsidiary,
NMS, Corporate Finance is a primary dealer of U.S. Government Securities and
underwrites, distributes and makes markets in high-grade and high-yield debt
securities and equity securities. Additionally, Corporate Finance is a market
maker in derivative products which include swap agreements, option contracts,
forward settlement contracts, financial futures and other
3
derivative products in certain interest rate, foreign exchange, commodity and
equity markets. In support of these activities, Corporate Finance takes
positions to support client demands and its own account. Major centers for the
above activities are Charlotte, Chicago, London, New York, San Francisco,
Singapore and Tokyo.
As part of its operations, the Corporation regularly evaluates the
potential acquisition of, and holds discussions with, various financial
institutions and other businesses of a type eligible for bank holding company
ownership or control. In addition, the Corporation regularly analyzes the
values of, and submits bids for, the acquisition of customer-based funds and
other liabilities and assets of such financial institutions and other
businesses. The Corporation also regularly considers the potential disposition
of certain of its assets, branches, subsidiaries or lines of businesses. As a
general rule, the Corporation publicly announces any material acquisitions or
dispositions when a definitive agreement has been reached.
Government Supervision and Regulation
General
As a registered bank holding company, the Corporation is subject to the
supervision of, and to regular inspection by, the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"). The Banks are principally
organized as national banking associations, which are subject to regulation,
supervision and examination by the Office of the Comptroller of the Currency
(the "Comptroller"). The Banks are also subject to regulation by the Federal
Deposit Insurance Corporation (the "FDIC") and other federal and state
regulatory agencies. In addition to banking laws, regulations and regulatory
agencies, the Corporation and its subsidiaries and affiliates are subject to
various other laws and regulations and supervision and examination by other
regulatory agencies, all of which directly or indirectly affect the operations
and management of the Corporation and its ability to make distributions. The
following discussion summarizes certain aspects of those laws and regulations
that affect the Corporation.
The activities of the Corporation, and those of companies which it
controls or in which it holds more than 5% of the voting stock, are limited to
banking or managing or controlling banks or furnishing services to or
performing services for its subsidiaries, or any other activity which the
Federal Reserve Board determines to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto. In making
such determinations, the Federal Reserve Board is required to consider whether
the performance of such activities by a bank holding company or its
subsidiaries can reasonably be expected to produce benefits to the public such
as greater convenience, increased competition or gains in efficiency that
outweigh possible adverse effects, such as undue concentration of resources,
decreased or unfair competition, conflicts of interest or unsound banking
practices. Generally, bank holding companies, such as the Corporation, are
required to obtain prior approval of the Federal Reserve Board to engage in any
new activity or to acquire more than 5% of any class of voting stock of any
company.
Bank holding companies are also required to obtain the prior approval of
the Federal Reserve Board before acquiring more than 5% of any class of voting
stock of any bank which is not already majority-owned by the bank holding
company. Pursuant to the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Banking and Branching Act"), a bank
holding company became able to acquire banks in states other than its home
state, beginning September 29, 1995, without regard to the permissibility of
such acquisitions under state law, but subject to any state requirement that
the bank to be acquired has been organized and operating for a minimum period
of time, not to exceed five years, and the requirement that the bank holding
company, prior to or following the proposed acquisition, controls no more than
10% of the total amount of deposits of insured depository institutions in the
United States and no more than 30% of such deposits in that state (or such
lesser or greater amount set by state law).
The Interstate Banking and Branching Act also authorizes banks to merge
across state lines, thereby creating interstate branches. This provision, which
became effective June 1, 1997, allowed each state, prior to the effective date,
the opportunity to "opt out" of this provision, thereby prohibiting interstate
branching within that state. Of those states in which the Banks are located,
only Texas has adopted legislation purporting to "opt out" of the interstate
branching provisions (which Texas law currently expires on September 2, 1999).
Furthermore, pursuant to the Interstate Banking and Branching Act, a bank is
now able to open new
4
branches in a state in which it does not already have banking operations if
such state enacts a law permitting such de novo branching. To the extent
permitted under these laws, the Corporation plans to consolidate its banking
subsidiaries (with the exception of NationsBank of Delaware, N.A.) into a
single bank as soon as practicable. The Corporation currently operates two
interstate banks (i.e., banks with banking centers in more than one state):
NationsBank, N.A., headquartered in Charlotte, North Carolina, with offices in
Arkansas, Florida, Georgia, Illinois, Iowa, Kansas, Maryland, Missouri, New
Mexico, North Carolina, Oklahoma, South Carolina, Texas, Virginia and the
District of Columbia; and Barnett Bank, N.A., headquartered in Jacksonville,
Florida (which the Corporation expects to merge into NationsBank, N.A. in the
fourth quarter of 1998), with offices in Florida and Georgia. Separate banks
continue to operate in Delaware, Florida, Kentucky (which the Corporation has
agreed to sell) and Tennessee. As previously described, the Corporation
regularly evaluates merger and acquisition opportunities, and it anticipates
that it will continue to evaluate such opportunities.
Proposals to change the laws and regulations governing the banking
industry are frequently introduced in Congress, in the state legislatures and
before the various bank regulatory agencies. The likelihood and timing of any
such proposals or bills and the impact they might have on the Corporation and
its subsidiaries cannot be determined at this time.
Capital and Operational Requirements
The Federal Reserve Board, the Comptroller and the FDIC have issued
substantially similar risk-based and leverage capital guidelines applicable to
United States banking organizations. In addition, those regulatory agencies may
from time to time require that a banking organization maintain capital above
the minimum levels, whether because of its financial condition or actual or
anticipated growth. The Federal Reserve Board risk-based guidelines define a
two-tier capital framework. Tier 1 capital consists of common and qualifying
preferred shareholders' equity, less certain intangibles and other adjustments.
Tier 2 capital consists of subordinated and other qualifying debt, and the
allowance for credit losses up to 1.25% of risk-weighted assets. The sum of
Tier 1 and Tier 2 capital less investments in unconsolidated subsidiaries
represents qualifying total capital, at least 50% of which must consist of Tier
1 capital. Risk-based capital ratios are calculated by dividing Tier 1 and
total capital by risk-weighted assets. Assets and off-balance sheet exposures
are assigned to one of four categories of risk-weights, based primarily on
relative credit risk. The minimum Tier 1 capital ratio is 4% and the minimum
total capital ratio is 8%. The Corporation's Tier 1 and total risk-based
capital ratios under these guidelines at March 31, 1998 were 6.80% and 11.19%,
respectively.
The leverage ratio is determined by dividing Tier 1 capital by adjusted
average total assets. Although the stated minimum ratio is 3%, most banking
organizations are required to maintain ratios of at least 100 to 200 basis
points above 3%. The Corporation's leverage ratio at March 31, 1998 was 5.64%.
Management believes that the Corporation meets its leverage ratio requirement.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies five capital categories for insured
depository institutions (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) and requires the respective Federal regulatory agencies to
implement systems for "prompt corrective action" for insured depository
institutions that do not meet minimum capital requirements within such
categories. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions, depending on the category in
which an institution is classified. Failure to meet the capital guidelines
could also subject a banking institution to capital raising requirements. An
"undercapitalized" bank must develop a capital restoration plan and its parent
holding company must guarantee that bank's compliance with the plan. The
liability of the parent holding company under any such guarantee is limited to
the lesser of 5% of the bank's assets at the time it became "undercapitalized"
or the amount needed to comply with the plan. Furthermore, in the event of the
bankruptcy of the parent holding company, such guarantee would take priority
over the parent's general unsecured creditors. In addition, FDICIA requires the
various regulatory agencies to prescribe certain non-capital standards for
safety and soundness relating generally to operations and management, asset
quality and executive compensation and permits regulatory action against a
financial institution that does not meet such standards.
The various regulatory agencies have adopted substantially similar
regulations that define the five capital categories identified by FDICIA, using
the total risk-based capital, Tier 1 risk-based capital and leverage
5
capital ratios as the relevant capital measures. Such regulations establish
various degrees of corrective action to be taken when an institution is
considered undercapitalized. Under the regulations, a "well capitalized"
institution must have a Tier 1 capital ratio of at least 6%, a total capital
ratio of at least 10% and a leverage ratio of at least 5% and not be subject to
a capital directive order. An "adequately capitalized" institution must have a
Tier 1 capital ratio of at least 4%, a total capital ratio of at least 8% and a
leverage ratio of at least 4%, or 3% in some cases. Under these guidelines,
each of the Banks is considered well capitalized.
Banking agencies have also adopted final regulations which mandate that
regulators take into consideration (i) concentrations of credit risk; (ii)
interest rate risk (when the interest rate sensitivity of an institution's
assets does not match the sensitivity of its liabilities or its
off-balance-sheet position); and (iii) risks from non-traditional activities,
as well as an institution's ability to manage those risks, when determining the
adequacy of an institution's capital. That evaluation will be made as a part of
the institution's regular safety and soundness examination. In addition, the
banking agencies have amended their regulatory capital guidelines to
incorporate a measure for market risk. In accordance with the amended
guidelines, the Corporation and any Bank with significant trading activity (as
defined in the amendment) must incorporate a measure for market risk in their
regulatory capital calculations effective for reporting periods after January
1, 1998. The revised guidelines are not expected to have a material impact on
the Corporation or the Banks' regulatory capital ratios or their well
capitalized status.
Distributions
The Corporation's funds for cash distributions to its shareholders are
derived from a variety of sources, including cash and temporary investments.
The primary source of such funds, however, is dividends received from the
Banks. Each of the Banks is subject to various general regulatory policies and
requirements relating to the payment of dividends, including requirements to
maintain capital above regulatory minimums. The appropriate federal regulatory
authority is authorized to determine under certain circumstances relating to
the financial condition of the bank or bank holding company that the payment of
dividends would be an unsafe or unsound practice and to prohibit payment
thereof.
In addition to the foregoing, the ability of the Corporation and the Banks
to pay dividends may be affected by the various minimum capital requirements
and the capital and non-capital standards established under FDICIA, as
described above. The right of the Corporation, its shareholders and its
creditors to participate in any distribution of the assets or earnings of its
subsidiaries is further subject to the prior claims of creditors of the
respective subsidiaries.
Source of Strength
According to Federal Reserve Board policy, bank holding companies are
expected to act as a source of financial strength to each subsidiary bank and
to commit resources to support each such subsidiary. This support may be
required at times when a bank holding company may not be able to provide such
support. Similarly, under the cross-guarantee provisions of the Federal Deposit
Insurance Act, in the event of a loss suffered or anticipated by the FDIC --
either as a result of default of a banking or thrift subsidiary of the
registrant or related to FDIC assistance provided to a subsidiary in danger of
default -- the other Banks may be assessed for the FDIC's loss, subject to
certain exceptions.
USE OF PROCEEDS
The net proceeds from the sale of the Securities will be used for general
corporate purposes, including the Corporation's working capital needs, the
funding of investments in, or extensions of credit to, its banking and
nonbanking subsidiaries, possible acquisitions of other financial institutions
or their assets or liabilities, possible acquisitions of or investments in
other businesses of a type eligible for bank holding companies and possible
reduction of outstanding indebtedness or repurchase of outstanding equity
securities of the Corporation. Pending such use, the Corporation may
temporarily invest the net proceeds. The Corporation may, from time to time,
engage in additional capital financings of a character and in amounts to be
determined by the Corporation in light of its needs at such time or times and
in light of prevailing market conditions. If the Corporation elects at the time
of issuance of Securities to make different or more specific use of proceeds
other than that set forth herein, such use will be described in the applicable
Prospectus Supplement.
6
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the Corporation's consolidated ratios of earnings to
fixed charges for the three months ended March 31, 1998 and for each of the
years in the five-year period ended December 31, 1997:
Year Ended
December 31,
Three Months Ended --------------------------------------------
March 31, 1998 1997 1996 1995 1994 1993
------------------- -------- -------- -------- -------- --------
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits ...... 1.5 2.0 2.0 1.8 2.0 2.6
Including interest on deposits ...... 1.3 1.5 1.5 1.4 1.5 1.6
For purposes of computing the consolidated ratios, earnings represent net
income of the Corporation plus applicable income taxes and fixed charges, less
capitalized interest and the equity in undistributed earnings of unconsolidated
subsidiaries and associated companies. Fixed charges represent interest expense
(exclusive of interest on deposits in one case and inclusive of such interest
in the other), capitalized interest, amortization of debt discount and
appropriate issuance costs and one-third (the amount deemed to represent an
appropriate interest factor) of net rent expense under all lease commitments.
PLAN OF DISTRIBUTION
The Corporation may offer and sell the Securities in one or more of the
following ways: (i) through underwriters or dealers; (ii) through agents; or
(iii) directly by the Corporation to one or more purchasers. Such underwriters,
dealers or agents may be NMS or other affiliates of NationsBank. The Prospectus
Supplement with respect to a particular offering of a series of Securities will
set forth the terms of the offering of such Securities, including the name or
names of any underwriters or agents with whom NationsBank has entered into
arrangements with respect to the sale of such Securities, the public offering
or purchase price of such Securities and the proceeds to the Corporation from
such sales, and any underwriting discounts, agency fees or commissions and
other items constituting underwriters' compensation, the initial public
offering price, any discounts or concessions to be allowed or reallowed or paid
to dealers and the securities exchange, if any, on which such Securities may be
listed.
If underwriters are used in the offer and sale of Securities, the
Securities will be acquired by the underwriters for their own account and may
be resold from time to time in one or more transactions, including negotiated
transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The Securities may be offered to the public either through
underwriting syndicates represented by managing underwriters, or by
underwriters without a syndicate, all of which underwriters in either case will
be designated in the applicable Prospectus Supplement. Unless otherwise set
forth in the applicable Prospectus Supplement, under the terms of the
underwriting agreement, the obligations of the underwriters to purchase
Securities will be subject to certain conditions precedent and the underwriters
will be obligated to purchase all the Securities if any are purchased. Any
initial public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
Securities also may be offered and sold directly by the Corporation or
through agents designated by the Corporation from time to time. Any agent
involved in the offer or sale of the Securities with respect to which this
Prospectus is delivered will be named in, and any commissions payable by the
Corporation to such agent will be set forth in or calculable from, the
applicable Prospectus Supplement or a pricing supplement thereto. Unless
otherwise indicated in the Prospectus Supplement, any such agent will be acting
on a best efforts basis for the period of its appointment.
Securities may also be offered and sold, if so indicated in the Prospectus
Supplement, in connection with a remarketing after their purchase, in
accordance with their terms, by one or more firms, including NMS or other
affiliates of the Corporation ("remarketing agents"), acting as principal for
their accounts or an agent for the Corporation. Any remarketing agent will be
identified and the terms of its agreement with the Corporation described in a
Prospectus Supplement.
If so indicated in the applicable Prospectus Supplement relating to Debt
Securities, the Corporation may authorize underwriters, dealers or agents to
solicit offers by certain institutions to purchase Debt Securities from the
Corporation at the public offering price set forth in such Prospectus
Supplement pursuant to delayed
7
delivery contracts ("Delayed Delivery Contracts") providing for payment and
delivery on the date or dates stated in the Prospectus Supplement. Each Delayed
Delivery Contract will be for an amount of Debt Securities not less than and,
unless the Corporation otherwise agrees, the aggregate amount of Debt
Securities sold pursuant to Delayed Delivery Contracts shall be not more than
the respective minimum and maximum amounts stated in the Prospectus Supplement.
Institutions with which Delayed Delivery Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies and educational and charitable institutions, but shall in
all cases be subject to the approval of the Corporation in its sole discretion.
The obligations of the purchaser under any Delayed Delivery Contract to pay for
and take delivery of Debt Securities will not be subject to any conditions
except that (i) the purchase of Debt Securities by such institution shall not
at the time of delivery be prohibited under the laws of the jurisdiction to
which such institution is subject; and (ii) any related sale of Debt Securities
to underwriters shall have occurred. A commission set forth in the Prospectus
Supplement will be paid to underwriters soliciting purchases of Debt Securities
pursuant to Delayed Delivery Contracts accepted by the Corporation. The
underwriters will not have any responsibility in respect of the validity or
performance of Delayed Delivery Contracts.
Any series of Securities offered and sold pursuant to this Prospectus and
the applicable Prospectus Supplement will be new issues of securities with no
established trading market. Any underwriters to whom Securities are sold by the
Corporation for public offering and sale may make a market in such Securities,
but such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for any Securities.
Any underwriter, dealer or agent participating in the distribution of any
Securities may be deemed to be an underwriter, as that term is defined in the
Securities Act of 1933, as amended (the "1933 Act"), of the Securities so
offered and sold, and any discounts or commissions received by them from
NationsBank and any profit realized by them on the sale or resale of the
Securities may be deemed to be underwriting discounts and commissions under the
1933 Act.
In order to facilitate the offering of the Securities, the underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Securities or any other securities the prices of which may be used
to determine payments on such Securities. Specifically, the underwriters may
overallot in connection with the offering, creating a short position in the
Securities for their own accounts. In addition, to cover overallotments or to
stabilize the price of the Securities or of any such other securities, the
underwriters may bid for, and purchase, the Securities or any such other
securities in the open market. Finally, in any offering of the Securities
through a syndicate of underwriters, the underwriting syndicate may reclaim
selling concessions allowed to an underwriter or a dealer for distributing the
Securities in the offering if the syndicate repurchases previously distributed
Securities in transactions to cover syndicate short positions, in stabilization
transactions or otherwise. Any of these activities may stabilize or maintain
the market price of the Securities above independent market levels. The
underwriters are not required to engage in these activities, and may end any of
these activities at any time.
Under agreements entered into with the Corporation, underwriters, dealers,
agents and remarketing agents may be entitled to indemnification by the
Corporation against certain civil liabilities, including liabilities under the
1933 Act, or to contribution with respect to payments which the underwriters or
agents may be required to make in respect thereof.
NMS is a broker-dealer and a direct subsidiary of the Corporation. Each
initial offering and any remarketing of Securities involving NMS or any other
affiliate of the Corporation will be conducted in compliance with the
requirements of Rule 2720 of the National Association of Securities Dealers,
Inc. (the "NASD") regarding a NASD member firm's distribution of the securities
of an affiliate. Following the initial distribution of the Securities, NMS may
offer and sell such Securities in secondary markets transactions at negotiated
prices relating to prevailing prices at the time of sale or otherwise. NMS may
act as principal or agent in such transactions. This Prospectus and related
Prospectus Supplements may be used by NMS in connection with such transactions.
NMS will not execute a transaction in the Securities in a discretionary
account without the prior written specific approval of NMS's customer. NMS has
no obligation to make a market in the Securities and may discontinue its
market-making activities at any time without notice, at its sole discretion.
Futhermore, NMS
8
may be required to discontinue its market-making activities during periods when
the Corporation is involved in a distribution of certain of its securities or
when NMS, by virtue of its affiliation with the Corporation, is aware of
material non-public information relating to the Corporation. In such instance,
NMS would not be able to recommence its market-making activities until such
distribution has been completed or such information has become publicly
available. It is not possible to determine the impact, if any, that any such
discontinuance may have on the market for the Securities. While other
broker-dealers may make a market in the Securities from time to time, there can
be no assurance that any broker-dealer will do so at any time when NMS
discontinues its market-making activities.
Underwriters, dealers and agents also may be customers of, engage in
transactions with, or perform other services for the Corporation in the
ordinary course of business.
DESCRIPTION OF DEBT SECURITIES
Any Senior Debt Securities offered hereby are to be issued under an
Indenture dated as of January 1, 1995 (such Indenture, as it may be amended
from time to time, the "Senior Indenture") between the Corporation and U.S.
Bank Trust National Association, as successor Trustee to BankAmerica National
Trust Company (the "Senior Trustee"). Any Subordinated Debt Securities offered
hereby are to be issued under an Indenture dated as of January 1, 1995 (such
Indenture, as it may be amended from time to time, the "Subordinated
Indenture") between the Corporation and The Bank of New York, Trustee (the
"Subordinated Trustee" and, together with the Senior Trustee, the "Trustees").
Each of the Senior Indenture and the Subordinated Indenture (each, an
"Indenture" and together, the "Indentures") is incorporated by reference in the
Registration Statement of which this Prospectus forms a part.
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to and qualified in their entirety by
reference to the provisions of the applicable Indentures. Whenever particular
sections or defined terms of the Indentures are referred to, it is intended
that such sections or defined items shall be incorporated herein by reference.
Unless otherwise indicated, capitalized terms shall have the meanings ascribed
to them in the Indentures.
General
The respective Indentures provide that there is no limitation on the
amount of debt securities that may be issued thereunder from time to time. The
amount of Debt Securities that may be offered and sold pursuant to this
Prospectus, however, is limited to the aggregate initial offering price of the
securities registered under the Registration Statement of which this Prospectus
forms a part, subject to reduction as the result of the sale by the Corporation
of other securities under the Registration Statement.
The Debt Securities will be direct, unsecured obligations of the
Corporation. The Senior Debt Securities of each series will rank equally with
all unsecured senior debt of the Corporation. The Subordinated Debt Securities
of each series will be subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness (as hereinafter defined) of the
Corporation. See "DESCRIPTION OF DEBT SECURITIES -- Subordination."
The Debt Securities will be issued in fully registered form without
coupons. The Debt Securities may be denominated in U.S. dollars or in another
currency or currency unit. Unless otherwise set forth in the applicable
Prospectus Supplement, any Debt Securities that are denominated in U.S. dollars
will be issued in denominations of $1,000 or an integral multiple thereof. If
any of the Debt Securities are denominated in a foreign currency or currency
unit, or if principal of (or premium, if any, on) or any interest on any of the
Debt Securities is payable in any foreign currency or currency unit, the
authorized denominations, as well as any investment considerations,
restrictions, tax consequences, specific terms and other information with
respect to such issue of Debt Securities and such foreign currency or currency
unit, will be set forth in the Prospectus Supplement relating thereto.
The Debt Securities may be issued in one or more series with the same or
various maturities. Certain Debt Securities may be issued which provide for an
amount less than the principal amount thereof to be due and payable in the
event of an acceleration of the maturity thereof (each an "Original Issue
Discount Security"). Original Issue Discount Securities may bear no interest or
may bear interest at a rate which at the
9
time of issuance is below market rates and will be sold at a discount (which
may be substantial) below their stated principal amount. Certain Debt
Securities may be issued or be deemed to be issued with original issue discount
for United States Federal income tax purposes. The Prospectus Supplement with
respect to any series of Debt Securities issued with such original issue
discount will contain a discussion of Federal income tax considerations with
respect thereto.
The particular terms of each series of Debt Securities to be offered and
sold will be described in the Prospectus Supplement relating to such series of
Debt Securities, including: (i) the designation of the particular series; (ii)
the aggregate principal amount of such series that may be authenticated and
delivered under the applicable Indenture; (iii) the person to whom any interest
on any Debt Security of the series shall be payable, if other than the person
in whose name the Debt Security (or one or more predecessor Debt Securities) is
registered at the close of business on the regular record date for such
interest; (iv) the date or dates on which the principal of the Debt Securities
of such series is payable; (v) the rate or rates, and if applicable the method
used to determine the rate, at which the Debt Securities of such series shall
bear interest, if any, the date or dates from which such interest shall accrue,
the date or dates on which such interest shall be payable and the record date
or dates for the interest payable on any Debt Securities on any interest
payment date; (vi) the place or places at which, subject to the provisions of
the applicable Indenture, the principal of (and premium, if any, on) and any
interest on Debt Securities of such series shall be payable, any Debt
Securities of the series may be surrendered for registration of transfer, and
notices and demands to or upon the Corporation in respect of the Debt
Securities of the series and the Indenture may be served; (vii) the obligation,
if any, of the Corporation to redeem or purchase Debt Securities of such
series, at the option of the Corporation or at the option of a holder thereof,
pursuant to any sinking fund or other redemption provisions and the period or
periods within which, the price or prices at which and the terms and conditions
upon which Debt Securities of the series may be so redeemed or purchased, in
whole or in part; (viii) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which any Debt Securities of such series
shall be issuable; (ix) if other than the principal amount thereof, the portion
of the principal amount of Debt Securities of such series which shall be
payable upon declaration of acceleration of the maturity thereof; (x) the
currency, currencies or currency units in which payment of the principal of
(and premium, if any, on) and any interest on any Debt Securities of the series
shall be payable if other than the currency of the United States of America and
the manner of determining the equivalent thereof in the currency of the United
States of America for purposes of the applicable Indenture; (xi) if the
principal of (and premium, if any, on) or any interest on the Debt Securities
of the series is to be payable, at the election of the Corporation or a holder
thereof, in one or more currencies or currency units, other than that or those
in which the Debt Securities are stated to be payable, the currency or
currencies in which payment of the principal of (and premium, if any, on) and
any interest on Debt Securities of such series as to which such election is
made shall be payable, and the periods within which and the terms and
conditions upon which such election is to be made; (xii) whether the amount of
payments of principal of (and premium, if any) or interest on such Debt
Securities may be determined with reference to an index, formula or other
method (which index, formula or method may be based on one or more currencies,
commodities, equity indices or other indices) and the manner in which such
amount shall be determined; (xiii) whether the Debt Securities will be issued
in book-entry only form; (xiv) the identification or method of selection of any
interest rate calculation agents, exchange rate calculation agents or other
agents with respect to Debt Securities of such series; (xv) if either or both
of Section 14.02 (defeasance) or Section 14.03 (covenant defeasance) of the
applicable Indenture do not apply to the Debt Securities of the series; (xvi)
any provisions relating to the extension of maturity of, or the renewal of,
Debt Securities of such series; and (xvii) any other terms of the Debt
Securities of such series (which terms shall not be inconsistent with the
provisions of the applicable Indenture).
The ability of NationsBank to make payments of principal of (and premium,
if any, on) and any interest on the Debt Securities may be affected by the
ability of the Banks to pay dividends. The ability of the Banks, as well as of
the Corporation, to pay dividends in the future currently is, and could be
further, influenced by bank regulatory requirements and capital guidelines. See
"NATIONSBANK CORPORATION -- Government Supervision and Regulation."
Neither the Senior Indenture nor the Subordinated Indenture contains
provisions that would provide protection to holders of Debt Securities against
a decline in credit quality resulting from takeovers, recapitalizations, the
incurrence of additional indebtedness or similar restructurings by the
Corporation. If credit
10
quality declines as a result of such an event, or otherwise, the ratings of any
Debt Securities then outstanding may be withdrawn or downgraded.
Conversion
The Debt Securities of any series may be convertible, at the option of the
holder or the Corporation, into Preferred Stock, Depositary Shares, Common
Stock or other Debt Securities if the Prospectus Supplement relating to such
series of Debt Securities so provides. In such case, such Prospectus Supplement
will set forth (i) the period(s) during which such conversion may be elected;
(ii) the conversion price payable and the number of shares or amount of
Preferred Stock, Depositary Shares, Common Stock or other Debt Securities
purchasable upon conversion, and adjustments thereto, if any, in certain
events; (iii) the procedures for electing such conversion; and (iv) all other
terms for such conversion (which terms shall not be inconsistent with the
provisions of the applicable Indenture).
Exchange, Registration and Transfer
At the option of the holder, subject to the terms of the applicable
Indenture, Debt Securities of any series (other than Debt Securities issued in
book-entry form) will be exchangeable for other Debt Securities of the same
series and of an equal aggregate principal amount and tenor of any authorized
denominations.
Debt Securities of a series may be presented for exchange as provided
above, and may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent of the Corporation designated
and maintained for such purpose with respect to such Debt Securities pursuant
to the terms of the applicable Indenture, as referred to in an applicable
Prospectus Supplement. Such transfer or exchange will be effected upon the
Security Registrar or transfer agent, as the case may be, being satisfied with
the documents of title and identity of the person making the request. No
service charge shall be made for any exchange or registration of transfer of
Debt Securities, but the Corporation may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith.
If a Prospectus Supplement refers to any transfer agents (in addition to
the Security Registrar) designated by the Corporation with respect to any
series of Debt Securities, the Corporation may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Corporation will be
required to maintain a transfer agent in each place of payment for such series.
The Corporation may at any time designate additional transfer agents with
respect to any series of Debt Securities.
The Corporation shall not be required to (i) issue, exchange or register
the transfer of any Debt Security of any series to be redeemed for a period of
15 days next preceding any selection of such Debt Securities to be redeemed; or
(ii) exchange or register the transfer of any Debt Security so selected, called
or being called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part.
For a discussion of restrictions on the exchange, registration and
transfer of Global Securities (hereinafter defined), see "REGISTRATION AND
SETTLEMENT."
Payment and Paying Agents
Unless otherwise indicated in an applicable Prospectus Supplement,
principal of (and premium, if any, on) and any interest on Debt Securities will
be payable, subject to any applicable laws and regulations, at the offices of
such paying agents as the Corporation may designate from time to time pursuant
to the applicable Indenture, except that, at the option of the Corporation,
payment of any interest may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the Security Register.
Unless otherwise indicated in an applicable Prospectus Supplement, payment of
interest on a Debt Security on any interest payment date generally will be made
to the person in whose name such Debt Security is registered at the close of
business on the regular record date for such interest payment date. For a
discussion of payment of principal and any premium or interest with respect to
Global Securities, see "REGISTRATION AND SETTLEMENT."
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The Corporation initially has designated the principal corporate trust
offices of the Senior Trustee and the Subordinated Trustee in the City of New
York as the places where the Senior Debt Securities and Subordinated Debt
Securities, respectively, may be presented for payment. The Corporation may at
any time designate additional paying agents or rescind the designation of any
paying agent or approve a change in the office through which any paying agent
acts. Any other paying agents designated by the Corporation for the Debt
Securities of each series will be named in an applicable Prospectus Supplement.
Subordination
The Subordinated Debt Securities are subordinate and subject, to the
extent and in the manner set forth in the Subordinated Indenture, in right of
payment to the prior payment in full of all Senior Indebtedness of the
Corporation. "Senior Indebtedness" is defined by the Subordinated Indenture as
any indebtedness for money borrowed (including all indebtedness of the
Corporation for borrowed and purchased money of the Corporation, all
obligations of the Corporation arising from off-balance sheet guarantees by the
Corporation and direct credit substitutes, and obligations of the Corporation
associated with derivative products such as interest and foreign exchange rate
contracts and commodity contracts) that is outstanding on the date of execution
of the Subordinated Indenture, or is thereafter created, incurred or assumed,
for the payment of which the Corporation is at the time of determination
responsible or liable as obligor, guarantor or otherwise, and all deferrals,
renewals, extensions and refundings of any such indebtedness or obligations,
other than the Subordinated Debt Securities or any other indebtedness as to
which, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such indebtedness is subordinate
in right of payment to any other indebtedness of the Corporation. The
Prospectus Supplement relating to each series of Subordinated Debt Securities
will set forth the aggregate amount of then outstanding Senior Indebtedness of
the Corporation and any limitation on the issuance of additional Senior
Indebtedness.
No payment on account of principal of (and premium, if any, on) or any
interest on the Subordinated Debt Securities shall be made, and no Subordinated
Debt Securities shall be purchased, either directly or indirectly, by the
Corporation or any of its subsidiaries, if any default or event of default with
respect to any Senior Indebtedness shall have occurred and be continuing and
the Corporation and the Subordinated Trustee shall have received written notice
thereof from the holders of at least 10% in principal amount of any kind or
category of any Senior Indebtedness (or the representative or representatives
of such holders) or the Subordinated Trustee shall have received written notice
thereof from the Corporation.
In the event that any Subordinated Debt Security is declared due and
payable before the date specified therein as the fixed date on which the
principal thereof is due and payable pursuant to the Subordinated Indenture, or
upon any payment or distribution of assets of the Corporation of any kind or
character to creditors upon any dissolution or winding up or total or partial
liquidation or reorganization of the Corporation, all principal of (and
premium, if any, on) and any interest due or to become due upon all Senior
Indebtedness shall first be paid in full before the holders of the Subordinated
Debt Securities (the "Subordinated Debt Holders"), or the Subordinated Trustee,
shall be entitled to retain any assets (other than shares of stock of the
Corporation as reorganized or readjusted or securities of the Corporation or
any other corporation provided for by a plan of reorganization or readjustment,
the payment of which is subordinated, at least to the same extent as the
Subordinated Debt Securities, to the payment of all Senior Indebtedness which
may at the time be outstanding, provided that the rights of the holders of the
Senior Indebtedness are not altered by such reorganization or readjustment), so
paid or distributed in respect of the Subordinated Debt Securities (for
principal or interest, if any). Upon such dissolution or winding up or
liquidation or reorganization, any payment or distribution of assets of the
Corporation of any kind or character, whether in cash, property or securities
(other than shares of stock of the Corporation as reorganized or readjusted or
securities of the Corporation or any other corporation provided for by a plan
of reorganization or readjustment, the payment of which is subordinated, at
least to the same extent as the Subordinated Debt Securities, to the payment of
all Senior Indebtedness which may at the time be outstanding, provided that the
rights of the holders of the Senior Indebtedness are not altered by such
reorganization or readjustment), to which the Subordinated Debt Holders or the
Subordinated Trustee would be entitled, except for the subordination provisions
of the Subordinated Indenture, shall be paid by the Corporation or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, or by the Subordinated Debt Holders or the
Subordinated Trustee if received by them or it, directly to the holders of the
Senior Indebtedness (pro rata to each such holder on the basis of the
respective amounts of Senior Indebtedness held by such holder)
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or their representatives, to the extent necessary to pay all Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment
or distribution is made to the Subordinated Debt Holders or to the Subordinated
Trustee.
Subject to the payment in full of all Senior Indebtedness, the
Subordinated Debt Holders shall be subrogated (equally and ratably with the
holders of all indebtedness of the Corporation which, by its express terms,
ranks on a parity with the Subordinated Debt Securities and is entitled to like
rights of subrogation) to the rights of the holders of Senior Indebtedness to
receive payments or distributions of assets of the Corporation applicable to
the Senior Indebtedness until the Subordinated Debt Securities shall be paid in
full.
Sale or Issuance of Capital Stock of Banks
The Senior Indenture prohibits the issuance, sale or other disposition of
capital stock, or securities convertible into or options, warrants or rights to
acquire capital stock, of any Principal Subsidiary Bank (as defined below) or
of any subsidiary which owns shares of capital stock, or securities convertible
into or options, warrants or rights to acquire capital stock, of any Principal
Subsidiary Bank, with the following exceptions: (a) sales of directors'
qualifying shares; (b) sales or other dispositions for fair market value, if,
after giving effect to such disposition and to conversion of any shares or
securities convertible into capital stock of a Principal Subsidiary Bank, the
Corporation would own directly or indirectly not less than 80% of each class of
the capital stock of such Principal Subsidiary Bank (or any successor
corporation thereto); (c) sales or other dispositions made in compliance with
an order of a court or regulatory authority of competent jurisdiction; (d) any
sale by a Principal Subsidiary Bank (or any successor corporation thereto) of
additional shares of its capital stock to its shareholders at any price, so
long as (i) prior to such sale the Corporation owns, directly or indirectly,
shares of the same class and (ii) immediately after such sale, the Corporation
owns, directly or indirectly, at least as great a percentage of each class of
capital stock of such Principal Subsidiary Bank as it owned prior to such sale
of additional shares; (e) any sale by a Principal Subsidiary Bank (or any
successor corporation thereto) of additional securities convertible into shares
of its capital stock to its shareholders at any price, so long as (i) prior to
such sale the Corporation owns, directly or indirectly, securities of the same
class and (ii) immediately after such sale the Corporation owns, directly or
indirectly, at least as great a percentage of each class of such securities
convertible into shares of capital stock of such Principal Subsidiary Bank as
it owned prior to such sale of additional securities; (f) any sale by a
Principal Subsidiary Bank (or any successor corporation thereto) of additional
options, warrants or rights to subscribe for or purchase shares of its capital
stock to its shareholders at any price, so long as (i) prior to such sale the
Corporation owns, directly or indirectly, options, warrants or rights, as the
case may be, of the same class and (ii) immediately after such sale, the
Corporation owns, directly or indirectly, at least as great a percentage of
each class of such options, warrants or rights, as the case may be, to
subscribe for or purchase shares of capital stock of such Principal Subsidiary
Bank as it owned prior to such sale of additional options, warrants or rights;
or (g) any issuance of shares of capital stock, or securities convertible into
or options, warrants or rights to subscribe for or purchase shares of capital
stock, of a Principal Subsidiary Bank or any subsidiary which owns shares of
capital stock, or securities convertible into or options, warrants or rights to
acquire capital stock, of any Principal Subsidiary Bank, to the Corporation or
a wholly owned subsidiary of the Corporation.
A Principal Subsidiary Bank is defined in the Senior Indenture as any Bank
(other than NationsBank of Delaware, National Association) with total assets
equal to more than 10% of the Corporation's total consolidated assets.
Waiver of Covenants
Under the terms of either Indenture, compliance with certain covenants or
conditions of such Indenture may be waived by the holders of a majority in
principal amount of the Debt Securities of all series to be affected thereby
and at the time outstanding under that Indenture (including, in the case of
holders of Senior Debt Securities, the covenant described above).
Modification of the Indentures
Each Indenture contains provisions permitting the Corporation and the
applicable Trustee to modify such Indenture or the rights of the holders of
Debt Securities thereunder, with the consent of the holders of
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not less than 66 2/3% in aggregate principal amount of the Debt Securities of
all series at the time outstanding under that Indenture and to be affected
thereby (voting as one class), except that no such modification shall (a)
extend the fixed maturity of, reduce the principal amount or redemption
premium, if any, of, or reduce the rate of or extend the time of payment of
interest on, any Debt Security without the consent of the holder of each
security so affected, or (b) reduce the aforesaid percentage of Debt
Securities, the consent of holders of which is required for any such
modification, without the consent of the holders of all Debt Securities then
outstanding under that Indenture. Each Indenture also provides that the
Corporation and the respective Trustee may, from time to time, execute
supplemental indentures in certain limited circumstances without the consent of
any holders of outstanding Debt Securities.
Each Indenture provides that in determining whether the holders of the
requisite principal amount of the Debt Securities outstanding have given any
request, demand, authorization, direction, notice, consent or waiver
thereunder, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable at such time upon an event of default,
and (ii) the principal amount of a Debt Security denominated in a foreign
currency or currency unit shall be the U.S. dollar equivalent on the date of
original issuance of such Debt Security.
Meetings and Action by Securityholders
Each Indenture contains provisions for convening meetings of the holders
of Debt Securities for certain purposes. A meeting may be called at any time by
the Trustee in its discretion and shall be called by the Trustee upon request
by the Corporation or the holders of at least 10% in aggregate principal amount
of the Debt Securities outstanding of such series, in any case upon notice
given in accordance with "Notices" below. Any resolution passed or decision
taken at any meeting of holders of Debt Securities of any series duly held in
accordance with the applicable Indenture, or such other action taken in
accordance with the terms of the applicable Indenture, will be binding on all
holders of Debt Securities of that series.
Defaults and Rights of Acceleration
An Event of Default is defined in the Subordinated Indenture generally as
bankruptcy of the Corporation under Federal bankruptcy laws. An Event of
Default is defined in the Senior Indenture generally as (i) the Corporation's
failure to pay principal (or premium, if any) when due on any securities of a
series; (ii) the Corporation's failure to pay interest on any securities of a
series, within 30 days after the same becomes due; (iii) the Corporation's
breach of any of its other covenants contained in the Senior Debt Securities or
the Senior Indenture, which breach is not cured within 90 days after written
notice to the Corporation by the Senior Trustee, or to the Corporation and the
Senior Trustee by the holders of at least 25% in principal amount of all Senior
Debt Securities then outstanding under the Senior Indenture and affected
thereby; and (iv) certain events involving the bankruptcy, insolvency or
liquidation of the Corporation.
Each Indenture provides that if an Event of Default under the respective
Indenture occurs and is continuing, either the respective Trustee or the
holders of 25% in principal amount (or, if any such Debt Securities are
Original Issue Discount Debt Securities, such lesser amounts as may be
described in an applicable Prospectus Supplement) of the Debt Securities then
outstanding under that Indenture (or, with respect to an Event of Default under
the Senior Indenture due to a default in the payment of principal (or premium,
if any) or interest or performance of any other covenant, the outstanding Debt
Securities of all series affected by such default) may declare the principal
amount of all of such Debt Securities to be due and payable immediately.
Payment of principal of the Subordinated Debt Securities may not be accelerated
in the case of a default in the payment of principal (or premium, if any) or
interest or the performance of any other covenant of the Corporation. Upon
certain conditions a declaration of an Event of Default may be annulled and
past defaults may be waived by the holders of a majority in principal amount of
the Debt Securities then outstanding (or of such series affected, as the case
may be).
Collection of Indebtedness, etc.
Each Indenture also provides that in the event of a failure by the
Corporation to make payment of principal of (and premium, if any, on) or any
interest on the Debt Securities (and, in the case of payment of interest, such
failure to pay shall have continued for 30 days) and upon the demand of the
respective Trustee, the Corporation will pay to such Trustee, for the benefit
of the holders of the Debt Securities, the amount then
14
due and payable on the Debt Securities for principal and interest, with
interest on the overdue principal and, to the extent payment of interest shall
be legally enforceable, upon overdue installments of interest at the rate borne
by the Debt Securities. Each Indenture further provides that if the Corporation
fails to pay such amount forthwith upon such demand, the respective Trustee
may, among other things, institute a judicial proceeding for the collection
thereof. However, each Indenture provides that notwithstanding any other
provision of the Indenture, the holder of any Debt Security shall have the
right to institute suit for the enforcement of any payment of principal of (and
premium, if any, on) and any interest on such Debt Security on the respective
stated maturities expressed in such Debt Security and that such right shall not
be impaired without the consent of such holder.
The holders of a majority in principal amount of the Debt Securities then
outstanding under an Indenture shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
under that Indenture, provided that the holders shall have offered to the
Trustee reasonable indemnity against expenses and liabilities. Each Indenture
requires the annual filing by the Corporation with the respective Trustee of a
certificate as to the absence of default and as to compliance with the terms of
that Indenture.
Notices
Except as otherwise provided in the applicable Indenture, notices to
holders of Debt Securities will be given by first-class mail to the addresses
of such holders as they appear in the Security Register.
Concerning the Trustees
The Corporation and the Banks have from time to time maintained deposit
accounts and conducted other banking transactions with The Bank of New York and
U.S. Bank Trust National Association, and their affiliated entities in the
ordinary course of business. Each of the Trustees also serves as trustee for
certain series of the Corporation's outstanding indebtedness under other
indentures.
DESCRIPTION OF WARRANTS
The Corporation may issue, together with Debt Securities or separately,
Debt Warrants for the purchase of Debt Securities on terms to be determined at
the time of issuance. The Corporation may also issue Universal Warrants to
purchase or sell (i) securities of an entity unaffiliated with the Corporation,
a basket of such securities, an index or indices of such securities or any
combination of the above, (ii) currencies or currency units or (iii)
commodities, on terms to be determined at the time of sale. The Corporation may
satisfy its obligations, if any, with respect to any Universal Warrants by
delivering the underlying securities, currencies or commodities or, in the case
of underlying securities or commodities, the cash value thereof, as set forth
in the applicable Prospectus Supplement. Warrants may be offered separately or
together with one or more additional Warrants or Debt Securities or any
combination thereof in the form of Units, as set forth in the applicable
Prospectus Supplement. If Warrants are issued as part of a Unit, the
accompanying Prospectus Supplement will specify whether such Warrants may be
separated from the other Securities in such Unit prior to the Warrants'
expiration date.
The Warrants are to be issued under one or more Warrant Agreements (each,
a "Warrant Agreement") to be entered into between the Corporation and a bank or
trust company, as Warrant Agent (the "Warrant Agent"), and may be issued in one
or more series, all as shall be set forth in the Prospectus Supplement relating
thereto. The forms of Warrant Agreement for the Warrants are filed as exhibits
to the Registration Statement of which this Prospectus is a part. The following
summaries of certain provisions of the applicable Warrant Agreement and the
Warrants do not purport to be complete and such summaries are subject to the
detailed provisions of such Warrant Agreement to which reference is hereby made
for a full description of such provisions, including the definition of certain
terms used herein, and for other information regarding the Warrants. Wherever
particular provisions of the Warrant Agreement are referred to, such provisions
are incorporated by reference as a part of the statements made, and the
statements are qualified in their entirety by such reference.
15
General
The particular terms of each series of Warrants to be offered and sold
will be described in the Prospectus Supplement relating to such series of
Warrants, including: (i) the specific designation and aggregate number of and
the price at which the Warrants will be issued; (ii) the currency or currency
unit for which the Warrants may be purchased; (iii) the date on which the right
to exercise the Warrants shall commence and the date (the "Warrant Expiration
Date") on which such right shall expire or, if the Warrants are not
continuously exercisable throughout such period, the specific date or dates on
which they will be exercisable (each, a "Warrant Exercise Date," which term
shall also mean, with respect to Warrants continuously exercisable for a period
of time, every date during such period); (iv) whether any Warrants will be
issued in global or definitive form or both; (v) any applicable United States
federal income tax consequences; (vi) the identity of the Warrant Agent in
respect of the Warrants and of any other depositaries, execution or paying
agents, transfer agents, registrars or determination or other agents; (vii) the
proposed listing, if any, of the Warrants or the securities purchasable upon
exercise thereof on any securities exchange; (viii) whether the Warrants are to
be sold separately or with other Securities as part of Units; and (ix) any
other terms of the Warrants.
The particular terms of each series of Debt Warrants will be described in
the Prospectus Supplement relating to such series of Debt Warrants, including:
(i) the designation, aggregate principal amount, currency or composite currency
unit and terms of the Debt Securities that may be purchased upon exercise of
the Warrants, (ii) if applicable, the designation and terms of the Debt
Securities with which the Warrants are issued and the number of the Debt
Warrants issued with each of such Debt Securities, (iii) if applicable, the
date on and after which the Securities and the related Debt Securities will be
separately transferable and (iv) the principal amount of Debt Securities
purchasable upon exercise of each Debt Warrant, the price at which and the
currency or currency unit in which such principal amount of Debt Securities may
be purchased upon such exercise and the method of such exercise.
The particular terms of each series of Universal Warrants will be
described in the Prospectus Supplement relating to such series of Universal
Warrants, including: (i) whether such Universal Warrants are put Warrants or
call Warrants; (ii) (a) the specific security, basket of securities, index or
indices of securities or combination of the above, (b) currencies or currency
units or (c) commodities (and, in each case, the amount thereof or the method
for determining the same) purchasable or saleable upon exercise of each
Universal Warrant; (iii) the price at which and the currency or currency unit
with which such underlying securities, currencies or commodities may be
purchased or sold upon such exercise (or the method of determining the same);
(iv) whether such exercise price may be paid in cash, by the exchange of any
other Security offered with such Universal Warrants or both and the method of
such exercise; and (v) whether the exercise of such Universal Warrants is to be
settled in cash or by delivery of the underlying securities or commodities or
both.
Warrants of each series will be evidenced by Warrant certificates
("Warrant Certificates") in registered form, which may be global Warrants or
definitive Warrants, as specified in the applicable Prospectus Supplement.
At the option of the holder upon request confirmed in writing, and subject
to the terms of the applicable Warrant Agreement, Warrants in definitive form
may be presented for exchange and for registration of transfer (with the form
of transfer endorsed thereon duly executed) at the corporate trust office of
the Warrant Agent for such series of Warrants (or any other office indicated in
the Prospectus Supplement relating to such series of Warrants) without service
charge and upon payment of any taxes and other governmental charges as
described in such Warrant Agreement. Such transfer or exchange will be effected
only if the Warrant Agent for such series of Warrants is satisfied with the
documents of title and identity of the person making the request.
Modifications
Each Warrant Agreement and the terms of the Warrants and the Warrant
Certificates may be amended by the Corporation and the Warrant Agent, without
the consent of the holders, for the purpose of curing any ambiguity, or of
curing, correcting or supplementing any defective or inconsistent provision
therein or in any other manner which the Corporation may deem necessary or
desirable and which will not adversely affect the interests of the affected
holders in any material respect.
The Corporation and any Warrant Agent may also modify or amend the Warrant
Agreement between them and the terms of the Warrants issued thereunder, with
the consent of the owners of not less than a
16
majority in number of the then outstanding unexercised Warrants affected,
provided that no such modification or amendment that changes the exercise price
of the Warrants, reduces the amount receivable upon exercise, cancellation or
expiration, shortens the period of time during which the Warrants may be
exercised or otherwise materially and adversely affects the rights of the
owners of the Warrants or reduces the percentage of outstanding Warrants, the
consent of whose owners is required for modification or amendment of the
applicable Warrant Agreement or the terms of the Warrants issued thereunder,
may be made without the consent of the owners affected thereby.
Enforceability of Rights of Warrantholders; Governing Law
The Warrant Agents will act solely as agents of the Corporation in
connection with the Warrant Certificates and will not assume any obligation or
relationship of agency or trust for or with any holders of Warrant Certificates
or beneficial owners of Warrants. Any holder of Warrant Certificates and any
beneficial owner of Warrants may, without the consent of the Warrant Agent, any
other holder or beneficial owner, the relevant Trustee, the holder of any Debt
Securities or other securities issuable upon exercise of Warrants or, if
applicable, the Euroclear Operator (as defined below) enforce by appropriate
legal action, on its own behalf, its right to exercise the Warrants evidenced
by such Warrant Certificates, in the manner provided therein and in the
applicable Warrant Agreement. No holder of any Warrant Certificate or
beneficial owner of any Warrants shall be entitled to any of the rights of a
holder of the Debt Securities or other securities purchasable upon exercise of
such Warrants, including, without limitation, the right to receive the payment
of dividends, principal of or premium, if any, or interest, if any, on such
Debt Securities or other securities or to enforce any of the covenants or
rights in the relevant Indenture or any other similar agreement. The Warrants
and each Warrant Agreement will be governed by, and construed in accordance
with, the laws of the State of New York.
Unsecured Obligations of the Corporation
The Warrants are unsecured contractual obligations of the Corporation and
will rank pari passu with the Corporation's other unsecured contractual
obligations and with the Corporation's unsecured and unsubordinated debt. Most
of the assets of the Corporation are owned by its subsidiaries. Therefore, the
Corporation's rights and the rights of its creditors, including Warrantholders,
to participate in the distribution of assets of any subsidiary upon such
subsidiary's liquidation or recapitalization will be subject to the prior
claims of such subsidiary's creditors, except to the extent that the
Corporation may itself be a creditor with recognized claims against the
subsidiary. The ability of the Corporation to meet its obligations under the
Warrants may be affected by the ability of the Banks to pay dividends. The
ability of the Banks, as well as the Corporation, to pay dividends in the
future currently is, and could be further, influenced by bank regulatory
requirements and capital guidelines. See "NATIONSBANK CORPORATION -- Government
Supervision and Regulation."
DESCRIPTION OF UNITS
As specified in the applicable Prospectus Supplement, Units will consist
of one or more Warrants and Debt Securities or any combination thereof. The
particular terms of each series of Units will be described in the Prospectus
Supplement relating to such series of Units, including: (i) all terms of Units
and of the Warrants and Debt Securities, or any combination thereof, comprising
such Units, including whether and under what circumstances the Securities
comprising such Units may or may not be traded separately, (ii) a description
of the terms of any agreement (a "Unit Agreement") to be entered into between
the Corporation and a bank or trust company as Unit Agent (the "Unit Agent")
governing the Units and (iii) a description of the provisions for the payment,
settlement, transfer or exchange of the Units.
REGISTRATION AND SETTLEMENT
DTC
If so specified in an applicable Prospectus Supplement, all or any portion
of the Securities of a series may be issued in book-entry form represented by
one or more global Securities in registered form (each, a "Global Security").
Unless otherwise specified in such Prospectus Supplement, each such Global
Security will be held through The Depository Trust Company ("DTC"), as
depositary, and will be registered in the name of Cede & Co., as nominee of
DTC. Accordingly, Cede & Co. is expected to be the holder of record of the
Securities.
17
Under the book-entry system of DTC, purchases of Securities of a series
represented by a Global Security must be made by or through persons that have
accounts with DTC ("DTC Participants") or persons that may hold interests
through DTC Participants ("Indirect Participants"). Upon the issuance and
deposit of a Global Security, DTC will credit, on its book-entry registration
and transfer system, the respective principal amounts of the individual
Securities represented by such Global Security to the accounts of DTC
Participants. The accounts to be credited will be designated by the
underwriters or agents of such Securities (or by the Corporation, if such
Securities are offered and sold directly by the Corporation). The ownership of
beneficial interests in such Global Security will be shown on, and the transfer
of that ownership will be effected only through, records maintained by DTC
(with respect to interests of DTC Participants) and the records of DTC
Participants (with respect to interests of Indirect Participants) and Indirect
Participants. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in certificated form. Such
limits and laws may impair the ability to own, transfer or pledge beneficial
interests in a Global Security.
So long as DTC or its nominee is the registered holder of a Global
Security, DTC or its nominee, as applicable, will be considered the sole owner
or holder of the Securities represented by such Global Security for all
purposes under the applicable Indenture, Warrant Agreement or Unit Agreement.
Except as provided below, owners of beneficial interests in a Global Security
will not be entitled to have Securities registered in their names, will not
receive or be entitled to receive physical delivery of such Securities in
certificated form and will not be considered the owners or holders thereof
under the applicable Indenture, Warrant Agreement or Unit Agreement.
Accordingly, in order to exercise any rights of a holder of the Securities
under the applicable Indenture, Warrant Agreement or Unit Agreement, each
person owning a beneficial interest in the Global Security representing such
Securities must rely on the procedures of DTC or, if such person is not a DTC
Participant, on the procedures of the DTC Participant and, if applicable, the
Indirect Participant, through which such person owns its interest.
So long as DTC or its nominee is the registered holder of a Global
Security, Securities of the series represented by such Global Security will
trade in DTC's Same Day Fund Settlement System, and secondary market trading
activity in such Securities will therefore be required by DTC to settle in
immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in such
Securities.
Except as otherwise provided herein, DTC or its nominee, as applicable, as
the registered holder of a Global Security shall be the only person entitled to
receive payments from the Corporation with respect to Securities of the series
represented by such Global Security. Accordingly, payments of principal of (and
premium, if any, on) and any interest on individual Debt Securities, and any
payments to holders with respect to Warrants or Units of the series represented
by such a Global Security will be made by the Corporation only to DTC or its
nominee, as applicable. DTC has advised the Corporation that it is DTC's
practice to credit DTC Participants' accounts on the payment date in accordance
with their respective holdings with respect to a Global Security as shown on
DTC's records, unless DTC has reason to believe that it will not receive
payment on such date. Payments by DTC Participants to beneficial owners are
governed by standing instructions and customary practices, as is the case with
securities held in "street name." Such instructions will be the responsibility
of such DTC Participant and not of DTC, the Corporation or any underwriter or
agent for the Securities of the series represented by such Global Security,
subject to any statutory or regulatory requirements as may be in effect from
time to time. The Corporation will in every case be discharged by payment to,
or to the order of, DTC or its nominee, as applicable, as the registered holder
of such Global Security, of the amount so paid. Each of the persons shown in
the records of DTC or its nominee as an owner of a beneficial interest in such
Global Security must look solely to DTC or its nominee, as the case may be, for
its share of any such payment so made by the Corporation. Neither the
Corporation, the Trustees, the Warrant Agents, the Unit Agents or any other
agent of the Corporation, agent of the Trustees or agent of the Warrant Agents
or Unit Agents will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial interests in the
Global Security representing such Securities or for maintaining, supervising or
reviewing any records relating to such beneficial interests.
DTC has advised the Corporation as follows: DTC is a limited-purpose trust
company organized under New York law, a "banking organization" within the
meaning of New York law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code as in effect in
18
the State of New York and a "clearing agency" registered pursuant to the
provisions of Section 17A of the 1934 Act. DTC was created to hold securities
deposited by DTC Participants and to facilitate the clearance and settlement of
securities transactions among DTC Participants in such securities through
electronic computerized book-entry changes in accounts of the DTC Participants,
thereby eliminating the need for physical movement of securities certificates.
Direct Participants in DTC include securities brokers and dealers, banks
(including certain subsidiaries of the Corporation), trust companies, clearing
corporations and certain other organizations, some of whom (and/or their
representatives) have ownership interests in DTC. DTC is owned by a number of
its Participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the NASD. Access to DTC's book-entry system is also
available to Indirect Participants, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a DTC
Participant, either directly or indirectly. The rules applicable to DTC and DTC
Participants are on file with the Commission.
To facilitate subsequent transfers, all securities deposited with DTC are
registered in the name of DTC's partnership nominee, Cede & Co. The deposit of
securities with DTC and their registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the actual beneficial
owners of securities deposited with it; DTC's records reflect only the identity
of the DTC Participants to whose accounts such securities are credited, which
may or may not be the beneficial owners. The DTC Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to DTC Participants, by
DTC Participants to Indirect Participants, and by DTC Participants and Indirect
Participants to beneficial owners, will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Neither DTC nor Cede & Co. will consent or vote with respect to
securities held by DTC. Under its usual procedures, DTC mails an omnibus proxy
to an issuer as soon as possible after the record date. The omnibus proxy
assigns Cede & Co.'s consenting or voting rights to those DTC Participants to
whose accounts the securities are credited on the record date (identified in a
listing attached to the omnibus proxy).
DTC can act only on behalf of DTC Participants, who in turn act on behalf
of Indirect Participants. Owners of beneficial interests in a Global Security
that are not DTC Participants or Indirect Participants but desire to purchase,
sell or otherwise transfer ownership of such interests may do so only through
DTC Participants and Indirect Participants. In addition, the ability of owners
of beneficial interests in a Global Security to pledge such interests to
persons or entities that do not participate in the DTC system may be limited
due to the lack of certificates for the Debt Securities of the series
represented by such Global Security.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial interests in Global Securities among DTC Participants,
it is under no obligation to perform or continue to perform such procedures,
and such procedures may be discontinued at any time.
If DTC is at any time unwilling, unable or ineligible to continue as a
depositary with respect to Securities of a particular series and a successor
depositary is not appointed by the Corporation within 90 days, the Corporation
will issue Securities of the series in certificated form in exchange for
beneficial interests in the Global Security representing such Securities. In
addition, the Corporation may at any time determine not to have Securities of a
series represented by Global Securities and, in such event, will issue
Securities of the series in certificated form in exchange for beneficial
interests in the Global Security representing such Securities. Any Securities
issued in certificated form in exchange for such beneficial interests in the
Global Security will be registered in such name or names as DTC shall instruct
the relevant Trustee, Warrant Agent, Unit Agent or other relevant agent of the
Corporation, the Trustees, the Warrant Agents or the Unit Agents. It is
expected that such instructions will be based upon directions received by DTC
from participants with respect to ownership of beneficial interests in such
Global Security.
Cedel Bank and Euroclear
If so specified in the applicable Prospectus Supplement, Securities of a
series to be issued in book-entry form and to be sold or traded outside the
United States may be represented by one or more Global Securities held through
Cedel Bank, societe anonyme ("Cedel Bank") or Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System (the "Euroclear
Operator" or "Euroclear"). Cedel
19
Bank and Euroclear will hold omnibus positions on behalf of Cedel Bank
Participants and Euroclear Participants (each as defined herein), respectively,
on the books of their respective depositaries (each, a "Depositary"), which in
turn will hold such positions in customers' securities accounts in the
Depositaries' names on the books of DTC.
Transfers between Cedel Bank Participants and Euroclear Participants will
occur in the ordinary way in accordance with their applicable rules and
operating procedures. Cross-market transfers between persons holding directly
or indirectly through DTC in the United States, on the one hand, and directly
or indirectly through Cedel Bank Participants or Euroclear Participants, on the
other, will be effected by DTC in accordance with DTC rules on behalf of the
relevant European international clearing system by its Depositary; however,
cross-market transactions will require delivery of instructions to the relevant
European international clearing system by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). The relevant European international clearing system will, if
the transaction meets its settlement requirements, deliver instructions to its
Depositary to take action to effect final settlement on its behalf by
delivering or receiving securities in DTC, and making or receiving in
accordance with normal procedures for same-day funds settlement applicable to
DTC. Cedel Bank Participants and Euroclear Participants may not deliver
instructions directly to the Depositaries.
Because of time-zone differences, credits for securities in Cedel Bank or
Euroclear as a result of a transaction with a DTC Participant will be made
during the subsequent securities settlement processing, and will be dated the
business day following the DTC settlement date, and such credits or any
transactions in such securities settled during such processing will be reported
to the relevant Cedel Bank Participant or Euroclear Participant on such
business day. Cash received in Cedel Bank or Euroclear as a result of sales of
securities by or through a Cedel Bank Participant or a Euroclear Participant to
a DTC Participant will be received with value on the DTC settlement date but
will be available in the relevant Cedel Bank or Euroclear cash account only as
of the business day following settlement in DTC.
Cedel Bank is incorporated under the laws of Luxembourg as a professional
depository. Cedel Bank holds securities for its participating organizations
("Cedel Bank Participants") and facilitates the clearance and settlement of
securities transactions between Cedel Bank Participants through electronic
book-entry changes in accounts of Cedel Bank Participants, thereby eliminating
the need for physical movement of certificates. Transactions may be settled by
Cedel Bank in any of 28 currencies, including United States dollars. Cedel Bank
provides to its Cedel Bank Participants, among other things, services for
safekeeping, administration, clearance and settlement of internationally traded
securities and securities lending and borrowing. Cedel Bank interfaces with
domestic markets in several countries. As a professional depository, Cedel Bank
is subject to regulation by the Luxembourg Monetary Institute. Cedel Bank
Participants consist of recognized financial institutions around the world,
including underwriters, securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations and may include the
underwriters or agents with respect to a particular series of Securities.
Indirect access to Cedel Bank is also available to others, such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Cedel Bank Participant, either directly or indirectly.
The Euroclear System (the "Euroclear System") was created in 1968 to hold
securities for participants of the Euroclear System ("Euroclear Participants")
and to clear and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk from
lack of simultaneous transfers of securities and cash. Transactions now may be
settled by Euroclear in any of 32 currencies, including United States dollars.
The Euroclear System includes various other services, including securities
lending and borrowing and interfaces with domestic markets in several countries
generally similar to the arrangements for cross-market transfers with DTC
described above. The Euroclear System is operated by the Euroclear Operator,
under contract with Euroclear Clearance System, S.C., a Belgian cooperative
corporation (the "Cooperative"). All operations are conducted by the Euroclear
Operator, and all Euroclear securities clearance accounts and Euroclear cash
accounts are accounts with the Euroclear Operator, not the Cooperative. The
Cooperative establishes policy for the Euroclear System on behalf of Euroclear
Participants. Euroclear Participants include banks (including central banks),
securities brokers and dealers and other professional financial intermediaries
and may include the underwriters or agents with respect to a particular series
of Securities. Indirect access to the
20
Euroclear System is also available to other firms that clear through or
maintain a custodial relationship with a Euroclear Participant, either directly
or indirectly.
The Euroclear Operator is the Brussels branch of a New York banking
corporation that is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Federal Reserve Board and the New York State
Banking Department, as well as the Belgian Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operating Procedures of the Euroclear System and applicable
Belgian law (collectively, the "Terms and Conditions"). The Terms and
Conditions govern transfers of securities and cash within the Euroclear System,
withdrawal of securities and cash from the Euroclear System and receipts of
payments with respect to securities in the Euroclear System. All securities in
the Euroclear System are held on a fungible basis without attribution of
specific certificates to specific securities clearance accounts. The Euroclear
Operator acts under the Terms and Conditions only on behalf of Euroclear
Participants and has no record of or relations with persons holding through
Euroclear Participants.
Distributions with respect to Securities of a series held through Cedel
Bank or Euroclear will be credited to the cash accounts of Cedel Bank
Participants or Euroclear Participants in accordance with the relevant system's
rules and procedures, to the extent received by its respective Depositary. Such
distributions will be subject to tax reporting in accordance with relevant
United States tax laws and regulations. The applicable Prospectus Supplement
with respect to a series of Debt Securities held through Cedel Bank or
Euroclear will set forth certain income tax consequences to foreign investors.
Cedel Bank or the Euroclear Operator, as the case may be, will take any other
action permitted to be taken by a holder of Securities under the applicable
Indenture, Warrant Agreement or Unit Agreement on behalf of a Cedel Bank
Participant or a Euroclear Participant only in accordance with its relevant
rules and procedures and subject to its respective Depositary's ability to
effect such actions on its behalf through DTC.
Although Cedel Bank and Euroclear have agreed to the foregoing procedures
in order to facilitate transfers of applicable Securities among participants of
DTC, Cedel Bank and Euroclear, they are under no obligation to perform or
continue to perform such procedures, and such procedures may be discontinued at
any time.
LEGAL OPINIONS
The legality of the Securities will be passed upon for the Corporation by
Smith Helms Mulliss & Moore, L.L.P., Charlotte, North Carolina, and for the
underwriters or agents by Stroock & Stroock & Lavan LLP, New York, New York. As
of the date of this Prospectus, certain members of Smith Helms Mulliss & Moore,
L.L.P. beneficially own approximately 160,000 shares of the Corporation's
Common Stock.
EXPERTS
The consolidated financial statements of the Corporation incorporated in
this Prospectus by reference to the Corporation's Annual Report on Form 10-K
for the year ended December 31, 1997 and the Corporation's Current Report on
Form 8-K filed April 16, 1998, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
The consolidated financial statements of BankAmerica Corporation at
December 31, 1997 and 1996, and for the three years ended December 31, 1997,
incorporated herein by reference from the Corporation's Current Report on Form
8-K filed on April 17, 1998 (as amended by Form 8-K/A-1 filed April 24, 1998
and Form 8-K/A-2 filed May 18, 1998), have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated herein
in reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
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You should rely only on the information incorporated by reference or provided
in this global prospectus supplement and the attached prospectus. We have not
authorized anyone to provide you with different information. We are not
offering these securities in any state where the offer is not permitted. You
should not assume that the information in this global prospectus supplement and
the attached prospectus is accurate as of any date other than the date on the
front of the applicable document.
Affiliates of the Corporation, including NationsBanc Montgomery Securities LLC,
will deliver this global prospectus supplement and the attached prospectus for
offers and sales in the secondary market.
[BANK OF AMERICA LOGO APPEARS HERE]
$1,500,000,000
5 7/8% Senior Notes, due 2009
-----------------------------------
GLOBAL PROSPECTUS SUPPLEMENT
-----------------------------------
NationsBanc Montgomery Securities LLC
Bear, Stearns & Co. Inc.
Lehman Brothers
Merrill Lynch & Co.
Salomon Smith Barney
Blaylock & Partners, L.P.
Interstate/Johnson Lane
Corporation
Utendahl Capital Partners, L.P.
The Williams Capital Group, L.P.
February 2, 1999
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