Bank of America Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Long-term Debt

Long-term Debt

12 Months Ended

Dec. 31, 2016

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, 2016 and 2015, and the related contractual rates and maturity dates as of December 31, 2016.




	December 31
(Dollars in millions)	2016		2015
Notes issued by Bank of America Corporation
Senior notes:
Fixed, with a weighted-average rate of 4.25%, ranging from 0.39% to 8.40%, due 2017 to 2046	$	108,933	$	109,861
Floating, with a weighted-average rate of 1.73%, ranging from 0.19% to 5.64%, due 2017 to 2044	13,164		13,900
Senior structured notes	17,049		17,548
Subordinated notes:
Fixed, with a weighted-average rate of 4.87%, ranging from 2.40% to 8.57%, due 2017 to 2045	26,047		27,216
Floating, with a weighted-average rate of 0.83%, ranging from 0.23% to 2.52%, due 2017 to 2026	4,350		5,029
Junior subordinated notes (related to trust preferred securities):
Fixed, with a weighted-average rate of 6.91%, ranging from 5.25% to 8.05%, due 2027 to 2067	3,280		5,295
Floating, with a weighted-average rate of 1.60%, ranging from 1.43% to 1.99%, due 2027 to 2056	552		553
Total notes issued by Bank of America Corporation	173,375		179,402
Notes issued by Bank of America, N.A.
Senior notes:
Fixed, with a weighted-average rate of 1.67%, ranging from 0.02% to 2.05%, due 2017 to 2018	5,936		7,483
Floating, with a weighted-average rate of 1.66%, ranging from 0.94% to 2.86%, due 2017 to 2041	3,383		4,942
Subordinated notes:
Fixed, with a weighted-average rate of 5.66%, ranging from 5.30% to 6.10%, due 2017 to 2036	4,424		4,815
Floating, with a weighted-average rate of 1.26%, ranging from 0.85% to 1.26%, due 2017 to 2019	598		1,401
Advances from Federal Home Loan Banks:
Fixed, with a weighted-average rate of 5.31%, ranging from 0.01% to 7.72%, due 2017 to 2034	162		172
Floating	—		6,000
Securitizations and other BANA VIEs⁽¹⁾	9,164		9,756
Other	3,084		2,985
Total notes issued by Bank of America, N.A.	26,751		37,554
Other debt
Senior notes:
Fixed, with a weighted-average rate of 5.50%, due 2017 to 2021	1		30
Structured liabilities	15,171		14,974
Nonbank VIEs⁽¹⁾	1,482		4,317
Other	43		487
Total other debt	16,697		19,808
Total long-term debt	$	216,823	$	236,764


⁽¹⁾	Represents the total long-term debt included in the liabilities of consolidated VIEs on the Consolidated Balance Sheet.

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, 2016 and 2015, the amount of foreign currency-denominated debt translated into U.S. Dollars included in total long-term debt was $44.7 billion and $46.4 billion. Foreign currency contracts may be used to convert certain foreign currency-denominated debt into U.S. Dollars.

At December 31, 2016, long-term debt of consolidated VIEs in the table above included debt of credit card, home equity and all other VIEs of $9.0 billion, $108 million and $1.5 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 3.80 percent, 4.36 percent and 1.52 percent, respectively, at December 31, 2016, and 3.80 percent, 4.61 percent and 0.96 percent, respectively, at December 31, 2015. 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 and structured liabilities are accounted for under the fair value option. For more information on these notes, see Note 21 – Fair Value Option. Debt outstanding of $75 million at December 31, 2016 was issued by a 100 percent owned finance subsidiary of the parent company and is unconditionally guaranteed by the parent company.

The following table shows the carrying value for aggregate annual contractual maturities of long-term debt as of December 31, 2016. 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 2016, the Corporation had total long-term debt maturities and redemptions in the aggregate of $51.6 billion consisting of $30.6 billion for Bank of America Corporation, $11.6 billion for Bank of America, N.A. and $9.4 billion of other debt. During 2015, the Corporation had total long-term debt maturities and redemptions in the aggregate of $40.4 billion consisting of $25.3 billion for Bank of America Corporation, $6.6 billion for Bank of America, N.A. and $8.5 billion of other debt.




Long-term Debt by Maturity

(Dollars in millions)	2017		2018		2019		2020		2021		Thereafter		Total
Bank of America Corporation
Senior notes	$	17,913	$	19,765	$	17,858	$	12,168	$	10,382	$	44,011	$	122,097
Senior structured notes	3,931		3,137		1,341		969		409		7,262		17,049
Subordinated notes	4,760		2,603		1,431		—		349		21,254		30,397
Junior subordinated notes	—		—		—		—		—		3,832		3,832
Total Bank of America Corporation	26,604		25,505		20,630		13,137		11,140		76,359		173,375
Bank of America, N.A.
Senior notes	3,649		5,649		—		—		—		21		9,319
Subordinated notes	3,328		—		1		—		—		1,693		5,022
Advances from Federal Home Loan Banks	9		9		14		12		2		116		162
Securitizations and other Bank VIEs ⁽¹⁾	3,549		2,300		3,200		—		—		115		9,164
Other	2,718		102		105		10		—		149		3,084
Total Bank of America, N.A.	13,253		8,060		3,320		22		2		2,094		26,751
Other debt
Senior notes	1		—		—		—		—		—		1
Structured liabilities	3,860		1,288		1,261		977		756		7,029		15,171
Nonbank VIEs ⁽¹⁾	246		27		15		—		—		1,194		1,482
Other	—		—		—		—		—		43		43
Total other debt	4,107		1,315		1,276		977		756		8,266		16,697
Total long-term debt	$	43,964	$	34,880	$	25,226	$	14,136	$	11,898	$	86,719	$	216,823


⁽¹⁾	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 171.

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.

On December 29, 2015, the Corporation provided notice of the redemption, which settled on January 29, 2016, of all trust preferred securities of Merrill Lynch Preferred Capital Trust III, Merrill Lynch Preferred Capital Trust IV and Merrill Lynch Preferred Capital Trust V with a total carrying value in the aggregate of $2.0 billion. In connection with the Corporation’s acquisition of Merrill Lynch & Co., Inc. (Merrill Lynch) in 2009, the Corporation recorded a discount to par value as purchase accounting adjustments associated with these Trust Preferred Securities. The Corporation recorded a charge to net interest income of $612 million in 2015 related to the discount on the securities.

The Trust Securities Summary table details the outstanding Trust Securities and the related Notes previously issued which remained outstanding at December 31, 2016.

Trust Securities Summary⁽¹⁾

(Dollars in millions)

December 31, 2016

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

March 2035

5.63

Semi-Annual

Any time

Capital Trust VII⁽²⁾

August 2005

August 2035

5.25

Semi-Annual

Any time

Capital Trust XI

May 2006

658

678

May 2036

6.63

Semi-Annual

Any time

Capital Trust XV

May 2007

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

Fleet

Capital Trust V

December 1998

December 2028

3-mo. LIBOR + 100 bps

Quarterly

On or after 12/18/03

BankBoston

Capital Trust III

June 1997

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

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 V

November 2006

1,495

1,496

November 2036

7.00

Quarterly

On or after 11/01/11

Merrill Lynch

Capital Trust I

December 2006

1,050

1,051

December 2066

6.45

Quarterly

On or after 12/11

Capital Trust III

August 2007

750

751

September 2067

7.375

Quarterly

On or after 9/12

Total

4,724

4,773


⁽¹⁾	Bank of America Capital Trust VIII, Countrywide Capital IV and Merrill Lynch Capital Trust II were redeemed during 2016.


⁽²⁾	Notes are denominated in British Pound. Presentation currency is U.S. Dollar.