Annual report pursuant to Section 13 and 15(d)

Long-term Debt

v2.4.1.9
Long-term Debt
 12 Months Ended
Dec. 31, 2014
Debt Disclosure [Abstract]  
Long-term Debt
Long-term Debt
Long-term debt consists of borrowings having an original maturity of one year or more. The table below presents the balance of long-term debt at December 31, 2014 and 2013, and the related contractual rates and maturity dates as of December 31, 2014.
 
 
 
 
 
December 31
(Dollars in millions)
2014
 
2013
Notes issued by Bank of America Corporation
 

 
 

Senior notes:
 

 
 

Fixed, with a weighted-average rate of 4.67%, ranging from 1.25% to 8.83%, due 2015 to 2044
$
113,069

 
$
109,845

Floating, with a weighted-average rate of 1.32%, ranging from 0.09% to 4.98%, due 2015 to 2044
14,559

 
22,268

Senior structured notes
22,168

 
30,575

Subordinated notes:
 

 
 

Fixed, with a weighted-average rate of 4.91%, ranging from 0.80% to 10.20%, due 2015 to 2038
26,995

 
22,379

Floating, with a weighted-average rate of 0.97%, ranging from 0.01% to 3.16%, due 2016 to 2026
1,705

 
1,798

Junior subordinated notes (related to trust preferred securities):
 

 
 

Fixed, with a weighted-average rate of 6.78%, ranging from 5.25% to 8.05%, due 2027 to perpetual
6,722

 
6,685

Floating, with a weighted-average rate of 0.92%, ranging from 0.78% to 1.24%, due 2027 to 2056
553

 
553

Total notes issued by Bank of America Corporation
185,771

 
194,103

Notes issued by Bank of America, N.A. (1)
 

 
 

Senior notes:
 

 
 

Fixed, with a weighted-average rate of 1.98%, ranging from 0.08% to 7.72%, due 2015 to 2187
2,893

 
1,670

Floating, with a weighted-average rate of 0.60%, ranging from 0.36% to 0.70%, due 2015 to 2041
5,686

 
3,684

Subordinated notes:
 

 
 

Fixed, with a weighted-average rate of 5.68%, ranging from 5.30% to 6.10%, due 2016 to 2036
4,921

 
4,876

Floating, with a weighted-average rate of 0.53%, ranging from 0.26% to 0.54%, due 2016 to 2019
1,401

 
1,401

Advances from Federal Home Loan Banks:
 
 
 
Fixed, with a weighted-average rate of 5.34%, ranging from 0.01% to 7.72%, due 2015 to 2034
183

 
1,441

Floating, with a weighted-average rate of 0.26%, ranging from 0.24% to 0.30%, due 2015 to 2016
10,500

 
3,001

Securitizations and other BANA VIEs
9,882

 
13,367

Total notes issued by Bank of America, N.A.
35,466

 
29,440

Other debt
 

 
 

Senior notes:
 
 
 
Fixed, with a rate of 5.50%, due 2017 to 2021
1

 
194

Floating, with a rate of 1.88%, due 2015
21

 
115

Structured liabilities
15,971

 
16,913

Junior subordinated notes (related to trust preferred securities):
 
 
 
Fixed, with a weighted-average rate of 7.14%, ranging from 7.00% to 7.28%, perpetual
339

 
340

Floating, with a rate of 0.86%, due 2027
66

 
66

Nonbank VIEs
3,425

 
6,081

Other
2,079

 
2,422

Total other debt
21,902

 
26,131

Total long-term debt
$
243,139

 
$
249,674


(1) 
On October 1, 2014, FIA Card Services, N.A. was merged into Bank of America, N.A.
Bank of America Corporation and Bank of America, N.A. maintain various U.S. and non-U.S. debt programs to offer both senior and subordinated notes. The notes may be denominated in U.S. Dollars or foreign currencies. At December 31, 2014 and 2013, the amount of foreign currency-denominated debt translated into U.S. Dollars included in total long-term debt was $51.9 billion and $73.4 billion. Foreign currency contracts may be used to convert certain foreign currency-denominated debt into U.S. Dollars.
At December 31, 2014, long-term debt of consolidated VIEs in the table above included debt of credit card, home equity and all other VIEs of $8.4 billion, $1.1 billion and $3.8 billion, respectively. Long-term debt of VIEs is collateralized by the assets of the VIEs. For additional information, see Note 6 – Securitizations and Other Variable Interest Entities.
The weighted-average effective interest rates for total long-term debt (excluding senior structured notes), total fixed-rate debt and total floating-rate debt were 4.06 percent, 4.65 percent and 0.84 percent, respectively, at December 31, 2014 and 4.37 percent, 5.14 percent and 0.92 percent, respectively, at December 31, 2013. The Corporation’s ALM activities maintain an overall interest rate risk management strategy that incorporates the use of interest rate contracts to manage fluctuations in earnings that are caused by interest rate volatility. The Corporation’s goal is to manage interest rate sensitivity so that movements in interest rates do not significantly adversely affect earnings and capital. The weighted-average rates are the contractual interest rates on the debt and do not reflect the impacts of derivative transactions.
Certain senior structured notes are accounted for under the fair value option. For more information on these senior structured notes, see Note 21 – Fair Value Option.
The table below shows the carrying value for aggregate annual contractual maturities of long-term debt as of December 31, 2014. Included in the table are certain structured notes issued by the Corporation that contain provisions whereby the borrowings are redeemable at the option of the holder (put options) at specified dates prior to maturity. Other structured notes have coupon or repayment terms linked to the performance of debt or equity securities, indices, currencies or commodities, and the maturity may be accelerated based on the value of a referenced index or security. In both cases, the Corporation or a subsidiary may be required to settle the obligation for cash or other securities prior to the contractual maturity date. These borrowings are reflected in the table as maturing at their contractual maturity date.
During 2014, the Corporation had total long-term debt maturities and purchases of $53.7 billion consisting of $33.9 billion for Bank of America Corporation, $8.9 billion for Bank of America, N.A. and $10.9 billion of other debt. During 2013, the Corporation had total long-term debt maturities and purchases of $65.6 billion consisting of $39.3 billion for Bank of America Corporation, $16.0 billion for Bank of America, N.A. and $10.3 billion of other debt. In 2013, in a combination of tender offers, calls and open-market transactions, the Corporation purchased senior and subordinated long-term debt with a carrying value of $9.2 billion and recorded net losses of $59 million in connection with these transactions.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term Debt by Maturity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
2015
 
2016
 
2017
 
2018
 
2019
 
Thereafter
 
Total
Bank of America Corporation
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes
$
14,905

 
$
17,373

 
$
18,935

 
$
20,006

 
$
16,206

 
$
40,203

 
$
127,628

Senior structured notes
5,558

 
2,825

 
1,791

 
1,885

 
1,526

 
8,583

 
22,168

Subordinated notes
1,221

 
5,074

 
5,219

 
2,951

 
1,580

 
12,655

 
28,700

Junior subordinated notes
—

 
—

 
—

 
—

 
—

 
7,275

 
7,275

Total Bank of America Corporation
21,684

 
25,272

 
25,945

 
24,842

 
19,312

 
68,716

 
185,771

Bank of America, N.A. (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes
777

 
2,498

 
5,162

 
—

 
19

 
123

 
8,579

Subordinated notes
—

 
1,069

 
3,553

 
—

 
1

 
1,699

 
6,322

Advances from Federal Home Loan Banks
4,503

 
6,003

 
10

 
10

 
16

 
141

 
10,683

Securitizations and other Bank VIEs (2)
1,151

 
1,298

 
3,554

 
—

 
2,450

 
1,429

 
9,882

Total Bank of America, N.A.
6,431

 
10,868

 
12,279

 
10

 
2,486

 
3,392

 
35,466

Other debt
 
 
 
 
 
 
 
 
 
 
 
 
 
Senior notes
21

 
—

 
1

 
—

 
—

 
—

 
22

Structured liabilities
2,314

 
2,133

 
2,296

 
1,281

 
1,027

 
6,920

 
15,971

Junior subordinated notes
—

 
—

 
—

 
—

 
—

 
405

 
405

Nonbank VIEs (2)
20

 
348

 
255

 
102

 
27

 
2,673

 
3,425

Other
254

 
927

 
429

 
45

 
4

 
420

 
2,079

Total other debt
2,609

 
3,408

 
2,981

 
1,428

 
1,058

 
10,418

 
21,902

Total long-term debt
$
30,724

 
$
39,548

 
$
41,205

 
$
26,280

 
$
22,856

 
$
82,526

 
$
243,139


(1) 
On October 1, 2014, FIA Card Services, N.A. was merged into Bank of America, N.A.
(2) 
Represents the total long-term debt included in the liabilities of consolidated VIEs on the Consolidated Balance Sheet.
Trust Preferred and Hybrid Securities
Trust preferred securities (Trust Securities) are primarily issued by trust companies (the Trusts) that are not consolidated. These Trust Securities are mandatorily redeemable preferred security obligations of the Trusts. The sole assets of the Trusts generally are junior subordinated deferrable interest notes of the Corporation or its subsidiaries (the Notes). The Trusts generally are 100 percent-owned finance subsidiaries of the Corporation. Obligations associated with the Notes are included in the long-term debt table on page 210.
Certain of the Trust Securities were issued at a discount and may be redeemed prior to maturity at the option of the Corporation. The Trusts generally have invested the proceeds of such Trust Securities in the Notes. Each issue of the Notes has an interest rate equal to the corresponding Trust Securities distribution rate. The Corporation has the right to defer payment of interest on the Notes at any time or from time to time for a period not exceeding five years provided that no extension period may extend beyond the stated maturity of the relevant Notes. During any such extension period, distributions on the Trust Securities will also be deferred and the Corporation’s ability to pay dividends on its common and preferred stock will be restricted.
The Trust Securities generally are subject to mandatory redemption upon repayment of the related Notes at their stated maturity dates or their earlier redemption at a redemption price equal to their liquidation amount plus accrued distributions to the date fixed for redemption and the premium, if any, paid by the Corporation upon concurrent repayment of the related Notes.
Periodic cash payments and payments upon liquidation or redemption with respect to Trust Securities are guaranteed by the Corporation or its subsidiaries to the extent of funds held by the Trusts (the Preferred Securities Guarantee). The Preferred Securities Guarantee, when taken together with the Corporation’s other obligations including its obligations under the Notes, generally will constitute a full and unconditional guarantee, on a subordinated basis, by the Corporation of payments due on the Trust Securities.
In 2013, the Corporation entered into various agreements with certain Trust Securities holders pursuant to which the Corporation paid $933 million in cash in exchange for $934 million aggregate liquidation amount of previously issued Trust Securities. Upon the exchange, the Corporation immediately surrendered the Trust Securities to the unconsolidated Trusts for cancellation, resulting in the cancellation of an equal amount of junior subordinated notes that had a carrying value of $934 million, resulting in an insignificant gain.
The Trust Securities Summary table details the outstanding Trust Securities and the related Notes previously issued which remained outstanding at December 31, 2014. For more information on Trust Securities for regulatory capital purposes, see Note 16 – Regulatory Requirements and Restrictions.
 
 
 
 
 
 
 
 
 
 
 
 
Trust Securities Summary
 
 
 
 
 
 
 
 
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2014
 
 
 
 
 
 
Issuer
Issuance Date
 
Aggregate
Principal
Amount
of Trust
Securities
 
Aggregate
Principal
Amount
of the
Notes
Stated Maturity
of the Trust Securities
Per Annum Interest
Rate of the Notes
 
Interest Payment
Dates
 
Redemption Period
Bank of America
 
 
 

 
 

 
 

 
 
 
 
Capital Trust VI
March 2005
 
$
36

 
$
37

March 2035
5.63
%
 
Semi-Annual
 
Any time
Capital Trust VII (1)
August 2005
 
7

 
7

August 2035
5.25

 
Semi-Annual
 
Any time
Capital Trust VIII
August 2005
 
524

 
540

August 2035
6.00

 
Quarterly
 
On or after 8/25/10
Capital Trust XI
May 2006
 
658

 
678

May 2036
6.63

 
Semi-Annual
 
Any time
Capital Trust XV
May 2007
 
1

 
1

June 2056
3-mo. LIBOR +80 bps

 
Quarterly
 
On or after 6/01/37
NationsBank
 
 
 

 
 

 
 

 
 
 
 
Capital Trust III
February 1997
 
131

 
136

January 2027
3-mo. LIBOR +55 bps

 
Quarterly
 
On or after 1/15/07
BankAmerica
 
 
 

 
 

 
 

 
 
 
 
Capital III
January 1997
 
103

 
106

January 2027
3-mo. LIBOR +57 bps

 
Quarterly
 
On or after 1/15/02
Barnett
 
 
 

 
 

 
 

 
 
 
 
Capital III
January 1997
 
64

 
66

February 2027
3-mo. LIBOR +62.5 bps

 
Quarterly
 
On or after 2/01/07
Fleet
 
 
 

 
 

 
 

 
 
 
 
Capital Trust V
December 1998
 
79

 
82

December 2028
3-mo. LIBOR +100 bps

 
Quarterly
 
On or after 12/18/03
BankBoston
 
 
 

 
 

 
 

 
 
 
 
Capital Trust III
June 1997
 
53

 
55

June 2027
3-mo. LIBOR +75 bps

 
Quarterly
 
On or after 6/15/07
Capital Trust IV
June 1998
 
102

 
106

June 2028
3-mo. LIBOR +60 bps

 
Quarterly
 
On or after 6/08/03
MBNA
 
 
 

 
 

 
 

 
 
 
 
Capital Trust B
January 1997
 
70

 
73

February 2027
3-mo. LIBOR +80 bps

 
Quarterly
 
On or after 2/01/07
Countrywide
 
 
 

 
 

 
 

 
 
 
 
Capital III
June 1997
 
200

 
206

June 2027
8.05

 
Semi-Annual
 
Only under special event
Capital IV
April 2003
 
500

 
515

April 2033
6.75

 
Quarterly
 
On or after 4/11/08
Capital V
November 2006
 
1,495

 
1,496

November 2036
7.00

 
Quarterly
 
On or after 11/01/11
Merrill Lynch
 
 
 

 
 

 
 

 
 
 
 
Preferred Capital Trust III
January 1998
 
750

 
901

Perpetual
7.00

 
Quarterly
 
On or after 3/08
Preferred Capital Trust IV
June 1998
 
400

 
480

Perpetual
7.12

 
Quarterly
 
On or after 6/08
Preferred Capital Trust V
November 1998
 
850

 
1,021

Perpetual
7.28

 
Quarterly
 
On or after 9/08
Capital Trust I
December 2006
 
1,050

 
1,051

December 2066
6.45

 
Quarterly
 
On or after 12/11
Capital Trust II
May 2007
 
950

 
951

June 2067
6.45

 
Quarterly
 
On or after 6/12
Capital Trust III
August 2007
 
750

 
751

September 2067
7.375

 
Quarterly
 
On or after 9/12
Total
 
 
$
8,773

 
$
9,259

 
 

 
 
 
 
(1) 
Notes are denominated in British Pound. Presentation currency is U.S. Dollar.