2003 Annual Report: Financial Review: Statements and Notes: Note 12 Short-term Borrowings and Long-term Debt

Short-term Borrowings

Bank of America, N.A. maintains a domestic program to offer up to a maximum of $50.0 billion, at any one time, of bank notes with fixed or floating rates and maturities of at least seven days from the date of issue. Short-term bank notes outstanding under this program totaled $3.3 billion at December 31, 2003 compared to $1.0 billion at December 31, 2002. These short-term bank notes, along with Treasury tax and loan notes, term federal funds purchased and commercial paper, are reflected in commercial paper and other short-term borrowings on the Consolidated Balance Sheet.

Long-term Debt

		December 31
(Dollars in millions)		2003				2002
Notes issued by
Bank of America Corporation(1,2)
Senior notes:
Fixed, ranging from 0.73% to 7.50%,
due 2004 to 2028		$	8,219			$	7,896
Floating, ranging from 0.20% to 6.20%,
due 2004 to 2043			28,669				19,294
Subordinated notes:
Fixed, ranging from 3.95% to 8.57%,
due 2004 to 2033			2,299				14,158
Floating, ranging from 0.60% to 2.38%,
due 2005 to 2037			16,742				5,167
Junior subordinated notes related to
trust preferred securities:(3)
Fixed, ranging from 7.70% to 8.25%,
due 2026 to 2027			2,127				-
Floating, ranging from 1.37% to 1.88%,
due 2027 to 2033			3,344				-
Total notes issued by
Bank of America Corporation			61,400				46,515
Notes issued by Bank of America, N.A. and
other subsidiaries(1,2)
Senior notes:
Fixed, ranging from 0% to 8.50%,
due 2004 to 2033			606				2,223
Floating, ranging from 1.01% to 2.93%,
due 2004 to 2011			3,491				3,229
Subordinated notes:
Fixed, 9.50%, due 2004			300				401
Floating, 1.16%, due 2019			8				8
Total notes issued by Bank of America, N.A.
and other subsidiaries			4,405				5,861
Notes issued by NB Holdings Corporation(1,2)
Junior subordinated notes related to
trust preferred securities:(3)
Fixed, ranging from 7.70% to 8.06%, due 2026			515				-
Floating, ranging from 1.78%, due 2027			258				-
Total notes issued by NB Holdings
Corporation			773				-
Other debt
Advances from the
Federal Home Loan Bank - Georgia			2,750				2,749
Advances from the
Federal Home Loan Bank - Oregon			5,989				5,992
Other			26				28
Total other debt			8,765				8,769
Total		$	75,343			$	61,145
(1)  Fixed-rate and floating-rate classifications as well as interest rates include the effect of interest rate swap contracts. (2)  Rates and maturity dates reflect outstanding debt at December 31, 2003. (3)  Trust preferred securities vehicles were deconsolidated in 2003 with the resulting liabilities to the trust companies included as a component of long-term debt.

The majority of the floating rates are based on three- and six-month London InterBank Offered Rates (LIBOR). Bank of America Corporation and Bank of America, N.A. maintain various domestic and international debt programs to offer both senior and subordinated notes. The notes may be denominated in U.S. dollars or foreign currencies. Foreign currency contracts are used to convert certain foreign currency-denominated debt into U.S. dollars.

At December 31, 2003 and 2002, Bank of America Corporation was authorized to issue approximately $26.0 billion and $37.5 billion, respectively, of additional corporate debt and other securities under its existing shelf registration statements. At December 31, 2003 and 2002, Bank of America, N.A. was authorized to issue approximately $25.9 billion and $28.2 billion, respectively, of bank notes and Euro medium-term notes.

Including the effects of interest rate contracts for certain longterm debt issuances, the weighted average effective interest rates for total long-term debt, total fixed-rate debt and total floating-rate debt (based on the rates in effect at December 31, 2003) were 2.36 percent, 6.01 percent and 1.41 percent, respectively, at December 31, 2003 and (based on the rates in effect at December 31, 2002) were 3.56 percent, 6.46 percent and 1.49 percent, respectively, at December 31, 2002. These obligations were denominated primarily in U.S. dollars.

Aggregate annual maturities of long-term debt obligations (based on final maturity dates) at December 31, 2003 are as follows:

On January 28, 2004, the Board of Directors authorized Bank of America Corporation to file a Shelf Registration Statement with the Securities and Exchange Commission (SEC). The Shelf Registration Statement was filed with the SEC on February 11, 2004 and covers $30.0 billion in debt and equity securities.

On January 15, 2004, Bank of America, N.A. completed a $60.0 billion Bank Note Offering Circular covering senior and subordinated bank notes. The Offering Circular was filed with the Office of the Comptroller of the Currency (OCC).

Subsequent to December 31, 2003 through February 25, 2004, Bank of America Corporation had issued a total of $4.6 billion of long-term senior and subordinated debt, with maturities ranging from 2009 to 2029.

Trust Preferred Securities

At December 31, 2003, the Corporation had 14 Trusts which have issued Trust Securities to the public. 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 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 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 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, will constitute a full and unconditional guarantee, on a subordinated basis, by the Corporation of payments due on the Trust Securities.

The following table is a summary of the outstanding Trust Securities and the Notes at December 31, 2003.