Quarterly report pursuant to Section 13 or 15(d)

Transactions with Bank of America

v2.4.0.6
Transactions with Bank of America
 3 Months Ended
Mar. 31, 2013
Related Party Transactions [Abstract]  
Transactions with Bank of America
Note 2.  
Transactions with Bank of America
Merrill Lynch has entered into various transactions with Bank of America, including transactions in connection with certain sales and trading and financing activities, as well as the allocation of certain shared services. Details on amounts receivable from and payable to Bank of America as of March 31, 2013 and December 31, 2012 are presented below.
Receivables from Bank of America are comprised of:
(dollars in millions)
 
March 31, 2013

December 31, 2012
Cash and cash equivalents
$
8,484

 
$
9,446

Cash and securities segregated for regulatory purposes
5,020

 
5,257

Receivables under resale agreements
10,756

 
13,090

Trading assets
299

 
409

Net intercompany funding receivable
11,016

 
16,473

Other receivables
1,964

 
1,155

Total
$
37,539

 
$
45,830

Payables to Bank of America are comprised of:
(dollars in millions)
 
March 31, 2013
 
December 31, 2012
Payables under repurchase agreements
$
335

 
$
556

Payables under securities loaned transactions
4,121

 
3,686

Short-term borrowings
865

 
925

Deposits
131

 
140

Trading liabilities
193

 
509

Other payables
3,296

 
1,780

Long-term borrowings
1,101

 
1,156

Total
$
10,042

 
$
8,752

 
 
 
 

Total net revenues and non-interest expenses related to transactions with Bank of America for the three months ended March 31, 2013 were $305 million and $562 million, respectively. Total net revenues and non-interest expenses related to transactions with Bank of America for the three months ended March 31, 2012 were $270 million and $426 million, respectively.
Total net revenues related to transactions with Bank of America for the three months ended March 31, 2013 and March 31, 2012 included intercompany service fee revenues of $240 million and $167 million, respectively. Total non-interest expenses related to transactions with Bank of America for the three months ended March 31, 2013 and March 31, 2012 included intercompany service fee expenses of $444 million and $394 million, respectively. Intercompany service fee revenue and service fee expense from Bank of America represents the allocations of certain centralized or shared business activities between Merrill Lynch and Bank of America. Such fees are generally determined in accordance with subsidiary transfer pricing agreements.

On January 6, 2013, Bank of America entered into an agreement with Fannie Mae ("FNMA") to resolve substantially all outstanding and potential repurchase and certain other claims relating to the origination, sale and delivery of certain residential mortgage loans. As part of the agreement, Bank of America repurchased for $6.6 billion certain residential mortgage loans that had previously been sold to FNMA, which Bank of America valued at less than the purchase price.  The majority of such loans are held by Merrill Lynch. See Note 10 for further information.
Bank of America and Merrill Lynch have entered into certain intercompany lending and borrowing arrangements to facilitate centralized liquidity management. Included in these arrangements is a $50 billion extendible one-year revolving credit facility that allows Bank of America to borrow funds from Merrill Lynch at a spread to the London Interbank Offered Rate ("LIBOR") that is reset periodically and is consistent with other intercompany agreements. The credit facility matures on January 1, 2014 and will automatically be extended by one year to the succeeding January 1st unless Merrill Lynch provides written notice not to extend at least 45 days prior to the maturity date. There were no amounts outstanding at both March 31, 2013 and December 31, 2012 under this credit facility. There is also a short-term revolving credit facility that allows Bank of America to borrow up to an additional $25 billion. Interest on borrowings under the credit facility is based on prevailing short-term market rates. The line of credit matures on February 11, 2014. At March 31, 2013 and December 31, 2012, approximately $10.7 billion and $16.2 billion, respectively, was outstanding under this line of credit. See Note 12 for further information on intercompany financing agreements with Bank of America. In addition, Bank of America has guaranteed the performance of Merrill Lynch on certain derivative transactions (see Note 6). Bank of America has also guaranteed certain debt securities, warrants and/or other certificates and obligations of certain subsidiaries of ML & Co. (see Note 12) and in certain instances the return of collateral posted by counterparties.