<PAGE>
Information contained herein is subject to completion or amendment.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission. This prospectus supplement
and the accompanying prospectus shall not constitute an offer to sell
or the solicitation of an offer to buy nor shall there be any
sale of these securities in any State in which such offer, solicitation
or sale would be unlawful prior to registration or qualification
under the securities laws of any State.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS SUPPLEMENT DATED SEPTEMBER 13, 1996
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JULY 12, 1996)
$1,400,000,000
NATIONSBANK(Register mark)
$500,000,000 % SENIOR NOTES, DUE 2001
$550,000,000 % SUBORDINATED NOTES, DUE 2006
$350,000,000 % SUBORDINATED NOTES, DUE 2016
This Prospectus Supplement relates to the following three separate series
of debt securities (collectively, the "Notes") of NationsBank Corporation
("NationsBank" or the "Corporation"): % Senior Notes, due 2001 (the "Senior
Notes"), % Subordinated Notes, due 2006 (the "2006 Notes") and %
Subordinated Notes, due 2016 (the "2016 Notes" and, with the 2006 Notes, the
"Subordinated Notes"). The Notes will bear interest from September , 1996
payable semiannually in arrears on March 15 and September 15 of each year. The
Notes are not redeemable prior to maturity and will not be listed on any
securities exchange.
The Notes will be issued in book-entry only form and will be represented by
one or more fully registered global securities (the "Global Notes") registered
in the name of a nominee of The Depository Trust Company, as depositary ("DTC").
The Notes will be available for purchase in denominations of $1,000 and integral
multiples thereof.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR 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.
[CAPTION]
<TABLE>
<S> <C> <C>
PRICE TO UNDERWRITING
PUBLIC (1) DISCOUNT (2)
<S> <C> <C>
Per % Senior Note, due 2001..................... % %
Per % Subordinated Note, due 2006...............
Per % Subordinated Note, due 2016...............
Total............................................. $ $
<CAPTION>
PROCEEDS TO
THE CORPORATION (1)(3)
<S> <C>
Per % Senior Note, due 2001..................... %
Per % Subordinated Note, due 2006...............
Per % Subordinated Note, due 2016...............
Total............................................. $
</TABLE>
(1) Plus accrued interest, if any, from September , 1996.
(2) The Corporation has agreed to indemnify the Senior Underwriters and the
Subordinated Underwriters (collectively, the "Underwriters") named herein
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(3) Before deducting expenses payable by the Corporation estimated to be
$ .
The Senior Notes are offered by the Senior Underwriters named below, subject
to prior sale, when, as and if issued to and accepted by them, subject to
approval of certain legal matters by counsel for the Underwriters and certain
other conditions. The Senior Underwriters reserve the right to reject any order
in whole or in part. It is expected that delivery of the Senior Notes will be
made through the facilities of DTC, Cedel Bank, societe anonyme ("Cedel Bank"),
and Morgan Guaranty Trust Company of New York, Brussels office, as operator of
the Euroclear System (the "Euroclear Operator" or "Euroclear"), on September ,
1996.
NATIONSBANC CAPITAL MARKETS, INC.
CHASE SECURITIES INC.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
STEPHENS INC.
The Subordinated Notes are offered by the Subordinated Underwriters named
below, subject to prior sale, when, as and if issued to and accepted by them,
subject to approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Subordinated Underwriters reserve the right to
reject any order in whole or in part. It is expected that delivery of the
Subordinated Notes will be made through the facilities of DTC, Cedel Bank and
Euroclear on September , 1996.
NATIONSBANC CAPITAL MARKETS, INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY & CO. INCORPORATED
UBS SECURITIES
The date of this Prospectus Supplement is September , 1996.
<PAGE>
IN CONNECTION WITH THESE OFFERINGS, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICES OF THE NOTES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
DESCRIPTION OF THE NOTES
The information herein concerning the Notes should be read in conjunction
with the statements under "DESCRIPTION OF DEBT SECURITIES" in the accompanying
Prospectus.
GENERAL
The Notes will be available for purchase in denominations of $1,000 and
integral multiples thereof. The Notes may not be redeemed prior to their
respective maturity dates and are not entitled to any sinking fund. Initially,
the Corporation will make payments of principal and interest at the office of
The Bank of New York, 101 Barclay Street, New York, New York 10286, as
authenticating and paying agent. Each of the Senior Notes, the 2006 Notes and
the 2016 Notes is a separate series of debt securities, the sale of which is not
contingent on the sale of any other such series. There is no limitation in the
Senior Indenture or the Subordinated Indenture (each as defined below) on the
amount of Senior Indebtedness (as described in the Prospectus) or other
obligations which may be issued by the Corporation.
THE SENIOR NOTES
The Senior Notes will be issued in the aggregate principal amount of
$500,000,000 under an Indenture (the "Senior Indenture") dated as of January 1,
1995 between the Corporation and First Trust of New York, National Association
(successor to BankAmerica National Trust Company), as trustee, and will mature
on September , 2001. The Senior Notes constitute a single series of debt
securities under the Senior Indenture and are unsecured and unsubordinated
obligations of the Corporation which rank equally with all other unsecured
senior debt of the Corporation.
THE SUBORDINATED NOTES
The 2006 Notes and the 2016 Notes will be issued in the aggregate principal
amounts of $550,000,000 and $350,000,000, respectively, under an Indenture (the
"Subordinated Indenture") dated as of January 1, 1995 between the Corporation
and The Bank of New York, as trustee, and will mature on September 15, 2006 and
September 15, 2016, respectively. The 2006 Notes and the 2016 Notes each
constitute a single series of debt securities under the Subordinated Indenture
and are unsecured, subordinate and junior in right of payment to all Senior
Indebtedness of the Corporation. There is no right of acceleration of the
payment of principal of the Subordinated Notes upon a default in the payment of
principal of or interest on such Subordinated Notes or in the performance of any
covenant of the Corporation contained in the Subordinated Indenture. Payment of
principal of the Subordinated Notes may be accelerated only in the case of the
bankruptcy of the Corporation. See "DESCRIPTION OF DEBT SECURITIES -- Defaults
and Rights of Acceleration" in the accompanying Prospectus.
INTEREST
Each series of the Notes will bear interest from September , 1996 at the
annual rate specified on the cover page of this Prospectus Supplement. Interest
on the Notes will be payable semiannually in arrears on each March 15 and
September 15, commencing March 15, 1997. The record date for the interest
payable shall be the close of business on the last day of the calendar month
preceding each interest payment date.
If any interest payment date falls on a day that is not a Business Day,
payment of such interest may be made on the next succeeding Business Day. If the
maturity date of any series of the Notes falls on a day that is not a Business
Day, the payment of principal will be made on the next succeeding Business Day
as if it were made on the date such payment was due and no interest will accrue
for the period after the stated maturity date. The term "Business Day" with
respect to any Note means any day other than a Saturday or Sunday that
S-2
<PAGE>
is not a day on which banking institutions in New York, New York or Charlotte,
North Carolina are authorized or required by law or regulation to be closed.
RECENT DEVELOPMENTS
PENDING MERGER WITH BOATMEN'S BANCSHARES, INC.
On August 29, 1996, the Corporation and Boatmen's Bancshares, Inc., a
corporation organized and existing under the laws of the State of Missouri
("Boatmen's"), and registered as a bank holding company under the Bank Holding
Company Act of 1956, as amended, entered into an Agreement and Plan of Merger
(the "Merger Agreement"), pursuant to which Boatmen's will be merged with a
wholly owned subsidiary of the Corporation (the "Merger"). The Board of
Directors of both the Corporation and Boatmen's approved the Merger Agreement
and the transactions contemplated thereby at their meetings held on August 29,
1996.
Boatmen's is headquartered in St. Louis, Missouri, with its principal
assets being the stock of its subsidiaries. At June 30, 1996, Boatmen's had
total assets of $41 billion and had approximately 628 banking offices in
Missouri, Kansas, Arkansas, Oklahoma, New Mexico, Texas, Iowa, Illinois and
Tennessee.
In accordance with the terms of the Merger Agreement, (i) each share of
Boatmen's common stock, $1.00 par value per share ("Boatmen's Common Stock"),
outstanding immediately prior to the effective time of the Merger (the
"Effective Time") will be converted into the right to receive 0.6525 of a share
(the "Exchange Ratio") of NationsBank common stock or, at the election of each
of the holders of Boatmen's Common Stock, an amount in cash in respect of each
share of Boatmen's Common Stock that is equal to the Exchange Ratio times the
average closing price of the NationsBank common stock during the 10 consecutive
trading day period during which the shares of NationsBank common stock are
traded on the New York Stock Exchange ending on the tenth calendar day
immediately prior to the anticipated Effective Time (such cash consideration in
the aggregate not to exceed 40% of the aggregate consideration paid by the
Corporation in exchange for Boatmen's Common Stock), and (ii) each share of
Boatmen's preferred stock will be converted into new shares of NationsBank
preferred stock having substantially similar terms.
If cash elections are made with respect to less than 40% of the Boatmen's
Common Stock, NationsBank currently expects to repurchase shares of NationsBank
common stock from time to time so that the pro forma impact of the Merger will
be the issuance of approximately 60% of the aggregate Merger consideration in
NationsBank common stock and 40% of the aggregate Merger consideration in cash.
The Merger is intended to constitute a tax-free reorganization under the
Internal Revenue Code of 1986, as amended, and to be accounted for as a
purchase.
Consummation of the Merger is subject to various conditions, including: (i)
receipt of approval by the shareholders of each of NationsBank and Boatmen's of
appropriate matters relating to the Merger Agreement and the Merger, as required
to be approved under applicable law; (ii) receipt of requisite regulatory
approvals from the Board of Governors of the Federal Reserve System and other
federal and state regulatory authorities; (iii) receipt of an opinion of counsel
as to the tax treatment of certain aspects of the Merger; (iv) listing, subject
to notice of issuance, of the NationsBank stock to be issued in the Merger; and
(v) satisfaction of certain other conditions. The Merger is expected to be
completed in January 1997. For additional information regarding this pending
acquisition, see the Corporation's Current Report on Form 8-K filed September 6,
1996, as amended by Form 8-K/A-1 filed September 11, 1996, incorporated herein
by reference.
S-3
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of the Corporation
and its subsidiaries as of June 30, 1996 and as adjusted to give effect to (i)
the issuance of the Notes offered hereby; (ii) the issuance on July 3, 1996 of
the Corporation's Floating Rate Notes, due 2002; (iii) the issuance and the
maturity of certain of the Corporation's and its subsidiaries' notes during the
period beginning July 1, 1996 through the date of this Prospectus Supplement;
and (iv) the issuance of the Corporation's medium-term notes during the period
beginning July 1, 1996 through the date of this Prospectus Supplement. This
table does not reflect the proposed issuance by NationsBank of its common stock
or preferred stock in connection with the proposed Merger nor does it reflect
the pro forma capitalization of NationsBank assuming consummation of the Merger.
For a discussion of the Merger see "RECENT DEVELOPMENTS".
<TABLE>
<CAPTION>
NATIONSBANK AS
ACTUAL ADJUSTED
<S> <C> <C>
(AMOUNTS IN MILLIONS)
<CAPTION>
<S> <C> <C>
LONG-TERM DEBT
SENIOR DEBT:
NationsBank Corporation (parent):
Floating rate medium-term notes, due 1996-2004.................................................. $ 3,906 $ 4,264
4.55 to 8.20% medium-term notes, due 1996-2006.................................................. 1,128 1,128
4 3/4% notes, due 1996.......................................................................... 400 --
8 1/2% notes, due 1996.......................................................................... 150 150
5.51% ESOP secured notes, due 1996-1999......................................................... 56 56
7 1/2% notes, due 1997.......................................................................... 250 250
5 1/8% notes, due 1998.......................................................................... 300 300
6 5/8% notes, due 1998.......................................................................... 400 400
Floating rate notes, due 1998................................................................... 300 300
5 3/8% notes, due 2000.......................................................................... 397 397
Floating rate notes, due 2000................................................................... 500 500
% notes, due 2001............................................................................ -- 500
Floating rate notes, due 2001................................................................... 200 200
Floating rate notes, due 2002................................................................... -- 499
7% notes, due 2003.............................................................................. 498 498
9 1/4% unsecured notes, due 2006................................................................ 124 124
Other senior notes.............................................................................. 45 30
8,654 9,596
Subsidiaries (1):
Bank notes with maturities greater than one year, due 1996-2003................................. 3,017 3,166
Floating rate mortgage-backed bonds, due 1998-2000.............................................. 2,999 2,999
Other senior notes.............................................................................. 679 679
6,695 6,844
Total senior debt............................................................................. 15,349 16,440
</TABLE>
S-4
<PAGE>
<TABLE>
<CAPTION>
NATIONSBANK AS
ACTUAL ADJUSTED
(AMOUNTS IN MILLIONS)
<S> <C> <C>
SUBORDINATED DEBT:
NationsBank Corporation (parent):
9 3/8% notes, due 1997.......................................................................... 75 75
9 3/4% notes, due 1999.......................................................................... 100 100
9 1/8% notes, due 2001.......................................................................... 299 299
8 1/8% notes, due 2002.......................................................................... 349 349
6.20% to 7.875% medium-term notes, due 2003 through 2011........................................ 436 496
6 1/2% notes, due 2003.......................................................................... 600 600
7 3/4% notes, due 2004.......................................................................... 299 299
6 7/8% notes, due 2005.......................................................................... 399 399
7 5/8% notes, due 2005.......................................................................... 296 296
6 1/2% notes, due 2006.......................................................................... 300 300
% notes, due 2006............................................................................ -- 550
9 3/8% notes, due 2009.......................................................................... 397 397
10.20% notes, due 2015.......................................................................... 200 200
7 3/4% notes, due 2015.......................................................................... 350 350
% notes, due 2016............................................................................ -- 350
8.57% medium-term notes, due 2024, putable 2004................................................. 100 100
7 1/4% notes, due 2025.......................................................................... 444 444
Other subordinated notes........................................................................ 40 40
4,684 5,644
Subsidiaries (1):
9 1/2% notes, due 2004.......................................................................... 300 300
Floating rate notes, due 2019, putable 1999..................................................... 8 8
308 308
Total subordinated debt....................................................................... 4,992 5,952
Total long-term debt.......................................................................... 20,341 22,392
SHAREHOLDERS' EQUITY
Preferred stock, authorized -- 45,000,000 shares; issued -- 5,346,543............................. 176 176
Common stock, authorized -- 800,000,000 shares; issued -- 301,082,855 (2)(3)...................... 5,130 5,130
Retained earnings................................................................................. 8,779 8,779
Other, including loan to ESOP trust............................................................... (60) (60)
Total shareholders' equity.................................................................... 14,025 14,025
$34,366 $36,417
</TABLE>
(1) These obligations are direct obligations of certain of the subsidiaries of
NationsBank and, as such, constitute claims against such subsidiaries prior
to the Corporation's equity interest therein.
(2) On July 16, 1996, the Corporation's Board of Directors authorized the
purchase of up to 20 million shares of NationsBank common stock, from time
to time during the next 36 months, in open market or private transactions.
Acting under such authority, on July 18, 1996, the Corporation purchased 10
million shares of its common stock pursuant to a purchase agreement with an
agent of the Corporation. In addition, the Board of Directors has authorized
the repurchase in the open market from time to time of NationsBank common
stock representing the number of shares of NationsBank common stock the
Corporation intends to issue for its Dividend Reinvestment and Stock
Purchase Plan and other employee and director benefit plans, acquisitions
and other purposes.
(3) As of June 30, 1996, (a) 34.9 million shares of NationsBank common stock
were reserved for issuance under various employee and director benefit plans
of the Corporation and upon the conversion of the ESOP Convertible Preferred
Stock, Series C, and (b) 2.8 million shares of NationsBank common stock were
reserved for issuance under the Corporation's Dividend Reinvestment and
Stock Purchase Plan.
As of June 30, 1996, the Corporation had $2.6 billion of commercial paper
and other short-term notes payable outstanding. During the quarter ended June
30, 1996, the amount of commercial paper and other short-term notes payable
outstanding averaged $2.8 billion and ranged from a high of $3.1 billion to a
low of $2.5 billion. At June 30, 1996, the Corporation had unused lines of
credit aggregating $1.5 billion, principally to support commercial paper
borrowings.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
the six months ended June 30, 1996 and for each of the years in the five-year
period ended December 31, 1995:
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED DECEMBER 31,
JUNE 30, 1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits....................................... 1.8 1.7 1.9 2.3 2.4 1.1
Including interest on deposits....................................... 1.4 1.4 1.5 1.5 1.4 1.0
</TABLE>
S-5
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data for the five years ended December 31,
1995 are derived from financial statements of the Corporation audited by Price
Waterhouse LLP, independent accountants. The financial data for the six months
ended June 30, 1996 and 1995 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 six months ended June 30, 1996
are not necessarily indicative of the results that might be expected for any
other interim period or for the year as a whole.
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED JUNE 30, DECEMBER 31,
1996 1995 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
(AMOUNTS IN MILLIONS EXCEPT PER SHARE INFORMATION AND RATIOS)
Income statement:
Income from earning assets................................. $ 7,015 $ 6,461 $ 13,220 $ 10,529 $ 8,327 $ 7,780
Interest expense........................................... 3,871 3,818 7,773 5,318 3,690 3,682
Net interest income........................................ 3,144 2,643 5,447 5,211 4,637 4,098
Provision for credit losses................................ 310 140 382 310 430 715
Gains (losses) on sales of securities...................... 8 5 29 (13) 84 249
Noninterest income......................................... 1,802 1,456 3,078 2,597 2,101 1,913
Merger-related charge...................................... 118 -- -- -- 30 --
Other noninterest expense (including OREO expense)......... 2,806 2,579 5,181 4,930 4,371 4,149
Income before income taxes and effect of change in method
of accounting for income taxes........................... 1,720 1,385 2,991 2,555 1,991 1,396
Income tax expense (benefit)............................... 602 475 1,041 865 690 251
Income before effect of change in method of accounting for
income taxes............................................. 1,118 910 1,950 1,690 1,301 1,145
Effect of change in method of accounting for income
taxes.................................................... -- -- -- -- 200 --
Net income................................................. 1,118 910 1,950 1,690 1,501 1,145
Net income applicable to common shareholders............... 1,110 906 1,942 1,680 1,491 1,121
Per common share:
Earnings before effect of change in method of accounting
for income taxes......................................... $ 3.70 $ 3.31 $ 7.13 $ 6.12 $ 5.00 $ 4.60
Earnings................................................... 3.70 3.31 7.13 6.12 5.78 4.60
Cash dividends paid........................................ 1.16 1.00 2.08 1.88 1.64 1.51
Shareholders' equity (period-end).......................... 46.18 42.49 46.52 39.70 36.39 30.80
Balance sheet (period-end):
Total assets............................................... $192,308 $184,188 $187,298 $169,604 $157,686 $118,059
Total loans, leases and factored accounts receivable, net
of unearned income....................................... 123,705 110,923 117,033 103,371 92,007 72,714
Total deposits............................................. 108,124 100,606 100,691 100,470 91,113 82,727
Long-term debt............................................. 20,527 10,716 17,775 8,488 8,352 3,066
Common shareholders' equity................................ 13,905 11,465 12,759 10,976 9,859 7,793
Total shareholders' equity................................. 14,025 11,504 12,801 11,011 9,979 7,814
Average common shares issued (in thousands).................. 300,370 274,053 272,480 274,656 257,969 243,748
Performance ratios:
Return on average assets (1)............................... 1.09% .99% 1.03% 1.02% .97% 1.00%
Return on average common shareholders' equity (1)(2)....... 16.87 16.36 17.01 16.10 15.00 15.83
Risk-based capital ratios:
Tier 1..................................................... 7.58 7.03 7.24 7.43 7.41 7.54
Total...................................................... 11.93 10.90 11.58 11.47 11.73 11.52
Leverage capital ratio....................................... 6.64 5.65 6.27 6.18 6.00 6.16
Total equity to total assets................................. 7.29 6.25 6.83 6.49 6.33 6.62
Asset quality ratios:
Allowance for credit losses as a percentage of loans,
leases and factored accounts receivable, net of unearned
income (period-end)...................................... 1.85 1.95 1.85 2.11 2.36 2.00
Allowance for credit losses as a percentage of
nonperforming loans (period-end)......................... 268.34 239.09 306.49 273.07 193.38 103.11
Net charge-offs as a percentage of average loans, leases
and factored accounts receivable, net of unearned
income................................................... .50 .31 .38 .33 .51 1.25
Nonperforming assets as a percentage of net loans, leases,
factored accounts receivable and other real estate owned
(period-end)............................................. .80 .99 .73 1.10 1.92 2.72
<CAPTION>
1991
<S> <<C>
Income statement:
Income from earning assets................................. $ 9,398
Interest expense........................................... 5,599
Net interest income........................................ 3,799
Provision for credit losses................................ 1,582
Gains (losses) on sales of securities...................... 454
Noninterest income......................................... 1,742
Merger-related charge...................................... 330
Other noninterest expense (including OREO expense)......... 3,974
Income before income taxes and effect of change in method
of accounting for income taxes........................... 109
Income tax expense (benefit)............................... (93)
Income before effect of change in method of accounting for
income taxes............................................. 202
Effect of change in method of accounting for income
taxes.................................................... --
Net income................................................. 202
Net income applicable to common shareholders............... 171
Per common share:
Earnings before effect of change in method of accounting
for income taxes......................................... $ .76
Earnings................................................... .76
Cash dividends paid........................................ 1.48
Shareholders' equity (period-end).......................... 27.03
Balance sheet (period-end):
Total assets............................................... $110,319
Total loans, leases and factored accounts receivable, net
of unearned income....................................... 69,108
Total deposits............................................. 88,075
Long-term debt............................................. 2,876
Common shareholders' equity................................ 6,252
Total shareholders' equity................................. 6,518
Average common shares issued (in thousands).................. 226,305
Performance ratios:
Return on average assets (1)............................... .17%
Return on average common shareholders' equity (1)(2)....... 2.70
Risk-based capital ratios:
Tier 1..................................................... 6.38
Total...................................................... 10.30
Leverage capital ratio....................................... 5.07
Total equity to total assets................................. 5.91
Asset quality ratios:
Allowance for credit losses as a percentage of loans,
leases and factored accounts receivable, net of unearned
income (period-end)...................................... 2.32
Allowance for credit losses as a percentage of
nonperforming loans (period-end)......................... 81.82
Net charge-offs as a percentage of average loans, leases
and factored accounts receivable, net of unearned
income................................................... 1.86
Nonperforming assets as a percentage of net loans, leases,
factored accounts receivable and other real estate owned
(period-end)............................................. 4.01
</TABLE>
(1) In 1993, return on average assets and return on average common shareholders'
equity after the tax benefit from the impact of adopting SFAS 109
(Accounting for Income Taxes) were 1.12% and 17.33%, respectively.
(2) Average common shareholders' equity does not include the effect of market
value adjustments to securities available for sale and marketable equity
securities.
S-6
<PAGE>
SETTLEMENT AND REGISTRATION
SAME DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Notes are represented by Global Notes, all
payments of principal and interest will be made by the Corporation 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, so 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 Fund Settlement System and secondary
market trading activity in the Notes 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 the
Notes.
BOOK-ENTRY SYSTEM
The Notes will be issued in book-entry form only and will be represented by
one or more Global Notes held through DTC (in the United States), or through
Cedel Bank or Euroclear (in Europe). Notes held through DTC will be registered
in the name of Cede & Co., as nominee of DTC. Cedel Bank and Euroclear will hold
omnibus positions on behalf of Cedel Bank Participants (as defined below) and
Euroclear Participants (as defined below), respectively, through customers'
securities accounts in Cedel Bank's and Euroclear's names, respectively, on the
books of their respective depositaries, which in turn, will hold such positions
on the books of DTC.
Under the book-entry system of DTC, purchases of Notes must be made by or
through persons that have accounts with DTC ("Participants") or persons that may
hold interests through Participants ("Indirect Participants"). Upon the issuance
and deposit of a Global Note, DTC will credit, on its book-entry registration
and transfer system, the respective principal amounts of the individual Notes
represented by such Global Note to the accounts of Participants as designated by
the Underwriters. The ownership of beneficial interests in such Global Note will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC (with respect to interests of Participants) and the
records of Participants (with respect to interests of Indirect Participants) and
Indirect Participants. So long as DTC, or its nominee, is the registered holder
of a Global Note, DTC or its nominee will be considered the sole owner or holder
of the Notes represented by such Global Note for all purposes under the
applicable Indenture. Except as provided below, owners of beneficial interests
in a Global Note will not be entitled to have Notes registered in their names,
will not receive or be entitled to receive physical delivery of such Notes in
certificated form and will not be considered the owners or holders thereof under
the applicable Indenture. The laws of some jurisdictions require that certain
purchasers of securities take physical delivery of such securities in
certificated form. Such transfer restrictions and such laws may impair the
ability to own, transfer or pledge beneficial interests in a Global Note.
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
the State of New York and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities deposited by its Participants and to
facilitate the clearance and settlement of securities transactions among
Participants in such securities through electronic computerized book-entry
changes in accounts of the Participants, thereby eliminating the need for
physical movement of securities certificates. DTC's direct Participants include
securities brokers and dealers (including the Underwriters), 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 National Association of Securities Dealers, Inc. Indirect 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 Participant, either directly or indirectly. The rules
applicable to DTC and its Participants are on file with the Securities and
Exchange Commission.
S-7
<PAGE>
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 such as the Notes; DTC's records reflect
only the identity of the Participants to whose accounts such securities are
credited, which may or may not be the beneficial owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers. Conveyance of notices and other communications by DTC to
Participants, by Participants to Indirect Participants, and by 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
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 Participants, who in turn act on behalf of
Indirect Participants. Owners of beneficial interests in a Global Note that are
not Participants or Indirect Participants but desire to purchase, sell or
otherwise transfer ownership of such interests may do so only through
Participants and Indirect Participants. In addition, the ability of owners of
beneficial interests in a Global Note 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 Notes.
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, such 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 payment 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, 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 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 are 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 of
any Notes. Indirect access to Cedel Bank
S-8
<PAGE>
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 may now be settled
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 of
any series of the Notes. Indirect access to the 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 which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by the Board of Governors of the Federal Reserve System
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 relationship with persons holding through Euroclear Participants.
Distributions with respect to the Notes 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 Depositary. Such distributions will be subject to tax
reporting in accordance with relevant United States tax laws and regulations.
See "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES TO FOREIGN INVESTORS"
herein. Cedel Bank or the Euroclear Operator, as the case may be, will take any
other action permitted to be taken by a holder of the Notes under the applicable
Indenture on behalf of a Cedel Bank Participant or a Euroclear Participant only
in accordance with its relevant rules and procedures and subject to its
Depositary's ability to effect such actions on its behalf through DTC.
Although DTC, Cedel Bank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of the Notes 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.
Except as otherwise provided herein, the holder of a Global Note shall be
the only person entitled to receive payments with respect to Notes represented
by such Global Note. Accordingly, payments of principal of and any interest on
individual Notes represented by a Global Note will be made only to DTC or its
nominee, as the case may be, as the registered holder of the Global Note
representing such Notes. DTC has advised the Corporation that it is DTC's
practice to credit Participants' accounts on the payable date in accordance with
their respective holdings with respect to a Global Note as shown on DTC's
records, unless DTC has reason to believe that it will not receive payment on
such date. Payments by 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
Participant and not of DTC, the Underwriters or the Corporation, 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 the holder of such Global Note, of the amount so paid.
Each of the persons shown in the records of DTC or its
S-9
<PAGE>
nominee as an owner of a beneficial interest therein 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 trustee for the Notes, nor any
Paying Agent, Security Registrar or Transfer Agent for the Notes will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of owners of beneficial interests in a Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial interests.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial interests in Global Notes among its 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 and a successor depositary is not appointed by the Corporation within
90 days, the Corporation will issue registered Notes in certificated form in
exchange for beneficial interests in each Global Note. In addition, the
Corporation may at any time determine not to have Notes represented by Global
Notes and, in such event, will issue registered Notes in certificated form in
exchange for beneficial interests in Global Notes. In any such instance, an
owner of a beneficial interest in a Global Note will be entitled to physical
delivery in certificated form of a Note or Notes equal in principal amount to
such beneficial interest and to have such Note or Notes registered in its name.
Any Notes so issued in certificated form will be issued in denominations of
$1,000 or any integral multiple in excess thereof and will be issued in
registered form only, without coupons.
CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES TO FOREIGN INVESTORS
Holders of the Notes who are not U.S. Persons (as defined below) must comply
with applicable certification requirements in order to receive payments of
interest free of applicable withholding taxes. In no event will any payments by
the Corporation be increased as a result of any such withholding or other taxes.
A holder of a Note that is not a U.S. Person will be subject to the 30% U.S.
withholding tax that generally applies to payments of interest on registered
debt issued by U.S. Persons, unless (i) each clearing system, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business in the chain of intermediaries between such holder of a
Note and the U.S. entity required to withhold tax complies with applicable
certification requirements, and (ii) such holder of a Note takes one of the
following steps to obtain an exemption or reduced tax rate:
EXEMPTION FOR NON-U.S. PERSONS (FORM W-8). Holders of the Notes for which
the interest income is not effectively connected with a United States trade or
business, that do not own more than 10% of the stock of the Corporation and that
are non-U.S. Persons can obtain a complete exemption from the withholding tax by
filing a signed Form W-8 (Certificate of Foreign Status). If the information
shown on Form W-8 changes, a new form W-8 must be filed within 30 days of such
change.
EXEMPTION FOR NON-U.S. PERSONS WITH EFFECTIVELY CONNECTED INCOME (FORM
4224). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S.
branch, for which the interest income is effectively connected with its conduct
of a trade or business in the United States, can obtain an exemption from the
withholding tax by filing Form 4224 (Exemption from Withholding of Tax on Income
Effectively Connected with the Conduct of a Trade or Business in the United
States).
EXEMPTION OR REDUCED RATE FOR NON-U.S. PERSONS RESIDENT IN TREATY COUNTRIES
(FORM 1001). Non-U.S. Persons that are holders of the Notes and reside in a
country that has a tax treaty with the United States can obtain an exemption or
reduced tax rate (depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption or Reduced Rate Certificate). If the treaty provides only for a
reduced rate, withholding tax will be imposed at that rate unless the filer
alternatively files Form W-8. Form 1001 may be filed by the holder of a Note or
its agent.
EXEMPTION FOR U.S. PERSONS (FORM W-9). U.S. Persons can obtain a complete
exemption from the withholding tax by filing Form W-9 (Payer's Request for
Taxpayer Identification Number and Certification).
U.S. FEDERAL INCOME TAX REPORTING PROCEDURE. A holder of a Note or, in the
case of a Form 1001 or a Form 4224 filer, its agent, files by submitting the
appropriate form to the person through whom it holds (the clearing agency, in
the case of persons holding directly on the books of the clearing agency) prior
to the first interest
S-10
<PAGE>
payment occurring after its acquisition of a Note. Form W-8 and Form 1001 are
effective for three calendar years and Form 4224 is effective for one calendar
year.
The term "U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation or partnership organized in or under the laws of the United
States or any political subdivision thereof or (iii) an estate or trust the
income of which is includible in gross income for United States tax purposes,
regardless of its source. This summary does not deal with all aspects of U.S.
Federal income tax withholding that may be relevant to foreign holders of the
Notes. Investors are advised to consult their own tax advisors for specific tax
advice concerning their holding and disposing of the Notes.
USE OF PROCEEDS
The Corporation intends to use the net proceeds from the sale of the Notes
in connection with the Merger (See "RECENT DEVELOPMENTS"). The Corporation
expects to fund the remainder of its cash requirements relating to the Merger
through the issuance of additional debt and cash or other investments held by
the Corporation. Pending the closing of the Merger, the Corporation may
temporarily invest the net proceeds from the sale of the Notes in short term
investments, including advances to the Corporation's subsidiary banks. In the
event that the Merger is not consummated, the net proceeds from the sale of the
Notes will be used as described under "USE OF PROCEEDS" in the accompanying
Prospectus.
UNDERWRITING
THE SENIOR NOTES.
Subject to the terms and conditions set forth in an underwriting agreement
dated September , 1996 (the "Senior Underwriting Agreement") among the
Corporation and the Underwriters named therein (the "Senior Underwriters"), the
Corporation has agreed to sell to each of the Senior Underwriters and each of
the Senior Underwriters has severally agreed to purchase the principal amount of
the Senior Notes set forth opposite its name below at the price set forth on the
cover page of this Prospectus Supplement. The Senior Underwriters are committed
to purchase all the Senior Notes offered hereby if any of the Senior Notes are
purchased.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF THE
% SENIOR
NOTES,
SENIOR UNDERWRITER DUE 2001
<S> <C>
NationsBanc Capital Markets, Inc. ........................................................ $
Chase Securities Inc......................................................................
CS First Boston Corporation...............................................................
Goldman, Sachs & Co.......................................................................
Stephens Inc..............................................................................
Total........................................................................... $
</TABLE>
The Senior Underwriters have advised the Corporation that they propose
initially to offer the Senior Notes to the public at the Price to Public set
forth on the cover page of this Prospectus Supplement, and to certain dealers at
such price less a concession not in excess of % of the principal amount of the
Senior Notes. The Senior Underwriters may allow, and such dealers may reallow, a
discount not in excess of % of the principal amount of the Senior Notes on
sales to certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.
The Senior Underwriting Agreement provides that the Corporation will
indemnify the Senior Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or contribute to
payments the Senior Underwriters may be required to make in respect thereof.
THE SUBORDINATED NOTES.
Subject to the terms and conditions set forth in separate underwriting
agreements dated September , 1996 (the "Subordinated Underwriting Agreements")
each among the Corporation and the Underwriters named therein (the "Subordinated
Underwriters"), the Corporation has agreed to sell to each of the Subordinated
Underwriters and each of the Subordinated Underwriters has severally agreed to
purchase the principal
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<PAGE>
amount of the series of the Subordinated Notes set forth opposite its name below
at the prices set forth on the cover page of this Prospectus Supplement. The
Subordinated Underwriters are committed to purchase all the Subordinated Notes
of a single series offered hereby if any of the Subordinated Notes of that
series are purchased.
<TABLE>
<CAPTION>
PRINCIPAL PRINCIPAL
AMOUNT OF THE AMOUNT OF THE
% SUBORDINATED % SUBORDINATED
NOTES, NOTES,
SUBORDINATED UNDERWRITER DUE 2006 DUE 2016
<S> <C> <C>
NationsBanc Capital Markets, Inc. ............................ $ $
Lehman Brothers Inc...........................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.....................................
Morgan Stanley & Co. Incorporated.............................
UBS Securities LLC............................................
Total............................................... $
</TABLE>
The Subordinated Underwriters have advised the Corporation that they propose
initially to offer the 2006 Notes and the 2016 Notes to the public at the Prices
to Public set forth on the cover page of this Prospectus Supplement, and to
certain dealers at such prices less a concession not in excess of % of the
principal amount with respect to the 2006 Notes and % of the principal amount
with respect to the 2016 Notes. The Subordinated Underwriters may allow, and
such dealers may reallow, a discount not in excess of % of the principal
amount with respect to the 2006 Notes and % of the principal amount with
respect to the 2016 Notes on sales to certain other dealers. After the initial
public offering, the public offering prices, concessions and discounts may be
changed.
Each of the Subordinated Underwriting Agreements provides that the
Corporation will indemnify the Subordinated Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended,
or contribute to payments the Subordinated Underwriters may be required to make
in respect thereof.
GENERAL.
Each of the series of Notes is a new issue of securities with no established
trading market. The Corporation does not intend to apply for listing of any of
the Notes on any securities exchange. The Corporation has been advised by the
Senior Underwriters and the Subordinated Underwriters (collectively, the
"Underwriters") that they may make a market in the Senior Notes and the
Subordinated Notes, respectively. The Underwriters, however, are not obligated
to make a market in any of the Notes and may discontinue any market making at
any time without notice. The Corporation cannot provide any assurance that a
secondary market for any of the Notes will develop.
NationsBanc Capital Markets, Inc. ("NCMI") is a direct, wholly owned
subsidiary of NationsBank. Under Section 2720 of the Conduct Rules ("Section
2720") of the National Association of Securities Dealers, Inc. (the "NASD"),
when an NASD member, such as NCMI, participates in the distribution of an
affiliated company's securities, the offering must be conducted in accordance
with the applicable provisions of Section 2720. NationsBank is considered to be
an "affiliate" (as such term is defined in Section 2720) of NCMI. The offer and
sale of any Notes by NCMI will comply with the requirements of Section 2720
regarding the underwriting of securities of affiliates and with any restrictions
that may be imposed on NCMI by the Board of Governors of the Federal Reserve
System. In addition, under Section 2720, no NASD member participating in offers
and sales of the Notes may execute a transaction in the Notes in a discretionary
account without the specific prior written approval of the member's customer.
Each of the Underwriters provides or has provided investment banking
services to NationsBank from time to time in the ordinary course of business.
S-12
<PAGE>
PROSPECTUS
NATIONSBANK(R)
DEBT SECURITIES
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").
NationsBank may sell up to $3,000,000,000 in aggregate initial offering price of
Debt Securities (or the U.S. dollar equivalent thereof if any of the Debt
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 Debt 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.
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.
The Debt Securities may be denominated in U.S. dollars or in another
currency or currency unit (such as the European Currency Unit), and the
principal of (and premium, if any, on) or interest on the Debt Securities may be
payable in U.S. dollars or such foreign currency or currency unit. The specific
terms of each series of Debt Securities offered pursuant to this Prospectus,
including the specific designation, aggregate principal amount, currency or
currency unit in which the principal and any premium or interest may be payable,
authorized denominations, maturity, any premium, any interest rate (which may be
fixed or variable), any interest payment dates, any optional or mandatory
redemption terms, any sinking fund provisions, any subordination terms, any
terms for conversion (in the event that such series is convertible at the option
of the holder or NationsBank into Preferred Stock, Depositary Shares, Common
Stock or other Debt Securities), the form of such series, any securities
exchange on which such Debt Securities may be listed, and any other terms of
such series of Debt Securities will be set forth in the Prospectus Supplement
relating to such series.
The Debt 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 of the Debt
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. The net proceeds to the Corporation from such sale also will
be set forth in such Prospectus Supplement.
This Prospectus may not be used to consummate sales of Debt 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, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
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 July 12, 1996.
<PAGE>
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, 1995;
(b) The Corporation's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1996;
(c) The Corporation's Current Reports on Form 8-K filed January 12,
1996, February 1, 1996, March 8, 1996, April 17, 1996, May 16, 1996 and
July 5, 1996; and
(d) The description of the Corporation's Common Stock contained in its
registration statement filed pursuant to Section 12 of the 1934 Act, and
any amendment or report filed for the purpose of updating such description,
including the Corporation's Current Report on Form 8-K filed on September
21, 1994.
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
termination of the offering of the Debt Securities offered hereby 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. 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 Stock Exchange Incorporated,
301 Pine Street, San Francisco, California 94104.
2
<PAGE>
NATIONSBANK CORPORATION
GENERAL
NationsBank is a bank holding company established as a North Carolina
corporation in 1968 and is registered under the Bank Holding Company Act of
1956, as amended (the "BHCA"), with its principal assets being the stock of its
subsidiaries. Through its banking subsidiaries (the "Banks") and its various
non-banking subsidiaries, NationsBank provides banking and banking-related
services, primarily throughout the Southeast and Mid-Atlantic states and Texas.
The principal executive offices of NationsBank are located at NationsBank
Corporate Center in Charlotte, North Carolina 28255. Its telephone number is
(704) 386-5000.
OPERATIONS
NationsBank provides a diversified range of banking and certain nonbanking
financial services and products through its various subsidiaries. NationsBank
manages its business activities through three major business units: the General
Bank, Global Finance and Financial Services.
The General Bank provides comprehensive services in the commercial and
retail banking fields, including trust and private banking operations, the
origination and servicing of home mortgage loans, the issuance and servicing of
credit cards (through a Delaware subsidiary), indirect lending, dealer finance
and certain insurance services. The General Bank also offers full service
brokerage services and discount brokerage services and provides investment
advisory services to a proprietary mutual fund, as well as investment
management, banking and fiduciary services through subsidiaries of NationsBank.
As of March 31, 1996, the General Bank operated 2,005 banking offices through
the following Banks: NationsBank, N.A. (serving the states of North Carolina,
South Carolina, Maryland and Virginia and the District of Columbia);
NationsBank, N.A. (South) (serving the states of Florida and Georgia);
NationsBank of Kentucky, N.A.; NationsBank of Tennessee, N.A; and NationsBank of
Texas, N.A. The General Bank also provides fully automated, 24-hour cash
dispensing and depositing services throughout the states in which it is located,
through 2,946 automated teller machines.
Global Finance provides comprehensive corporate banking and investment
banking services to domestic and international customers, including treasury
management, loan syndication, asset-backed lending, leasing, factoring and
arrangement of asset-backed and project financing, as well as underwriting,
trading or distributing a wide range of securities (including bank-eligible
securities and, to a limited extent, bank-ineligible securities as authorized by
the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board") under Section 20 of the Glass-Steagall Act), and trading and
distributing a wide range of derivative products in certain interest rate,
foreign exhange, commodity and equity markets. Global Finance provides its
services through various offices located in major United States cities as well
as in London, Frankfurt, Singapore, Bogota, Mexico City, Grand Cayman, Nassau,
Seoul, Tokyo, Osaka, Taipei and Hong Kong.
Financial Services consists of NationsCredit Consumer Corporation (formerly
NationsCredit Corporation), primarily a consumer finance subsidiary, and
NationsCredit Commercial Corporation (formerly Greyrock Capital Group Inc.),
primarily a commercial finance subsidiary. NationsCredit Consumer Corporation,
which has approximately 371 offices located in 34 states, provides personal,
mortgage and automobile loans to consumers and retail finance programs to
dealers. NationsCredit Commercial Corporation consists of six divisions that
specialize in one or more of the following areas: equipment loans and leasing;
loans for debt restructuring, mergers and acquisitions and working capital; real
estate, golf/recreational and health care financing; and inventory financing to
manufacturers, distributors and dealers.
As part of its operations, NationsBank regularly evaluates the potential
acquisition of, and holds discussions with, various financial institutions and
other businesses of a type eligible for bank holding company investment. In
addition, NationsBank 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. As a general rule, NationsBank
publicly announces such material acquisitions when a definitive agreement has
been reached.
SUPERVISION AND REGULATION
GENERAL. As a registered bank holding company, NationsBank is subject to
the supervision of, and to regular inspection by, the Federal Reserve Board. The
Banks are organized as national banking associations, which
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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 regulatory agencies. In addition to banking laws, regulations and
regulatory agencies, NationsBank 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 NationsBank.
Under the BHCA, the activities of NationsBank, 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 NationsBank, are required to obtain prior approval of
the Federal Reserve Board to engage in any new activity not previously approved
by the Federal Reserve Board or to acquire more than 5% of any class of voting
stock of any company.
The BHCA also requires bank holding companies 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"), which became effective
September 29, 1995, a bank holding company may acquire banks in states other
than its home state subject to any state requirement that the bank 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, therefore creating interstate branches, beginning June 1,
1997. Under such legislation, each state has the opportunity either to "opt out"
of this provision, thereby prohibiting interstate branching in such states, or
to "opt in" at an earlier time, thereby allowing interstate branching within
that state prior to June 1, 1997. Furthermore, pursuant to such act, a bank is
now able to open new branches in a state in which it does not already have
banking operations if such state enacts a law permitting such DE NOVO branching.
Of those states in which the Banks are located, Delaware, Maryland, North
Carolina and Virginia have enacted legislation to "opt in," thereby permitting
interstate branching prior to June 1, 1997, and Texas has adopted legislation to
"opt out" of the interstate branching provisions (which Texas law currently
expires on September 2, 1999).
As previously described, NationsBank regularly evaluates merger and
acquisition opportunities, and it anticipates that it will continue to evaluate
such opportunities in light of the new legislation.
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. In 1995, several bills were introduced in
Congress that would have the effect of broadening the securities underwriting
powers of bank holding companies and, possibly, permitting bank holding
companies to engage in nonfinancial activities. The likelihood and timing of any
such proposals or bills being enacted and the impact they might have on
NationsBank 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.
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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, 1996 were 7.35% and 11.71%, 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, 1996 was
6.19%. Management believes that NationsBank 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 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 adequately or well capitalized.
Banking agencies have also adopted regulations which mandate that
regulators take into consideration concentrations of credit risk and 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. This
evaluation will be made as a part of the institution's regular safety and
soundness examination. Banking agencies also have proposed amendments to
existing risk-based capital regulations to provide for the consideration of
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) in the determination of a bank's minimum capital
requirements. This proposal, while still under consideration, would require
banks with interest rate risk in excess of defined thresholds to maintain
additional capital beyond that generally required.
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. The amount of dividends that each Bank may declare in a calendar
year without approval of the Comptroller is the Bank's net profits for that
year, as defined by statute, combined with its net retained profits, as defined,
for the preceding two years. In addition, from time to time NationsBank applies
for, and may receive, permission from the Comptroller for one or more of the
Banks to declare special dividends. In 1996, the Banks can initiate dividend
payments without prior regulatory approval of up to $905 million plus an
additional amount equal to their net profits for 1996 up to the date of any such
dividend declaration.
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In addition to the foregoing, the ability of NationsBank 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. Furthermore, the Comptroller may prohibit the payment of a dividend by a
national bank if it determines that such payment would constitute an unsafe or
unsound practice. The right of NationsBank, 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. 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
NationsBank 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 Debt 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 in investment grade securities. 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 Debt 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.
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, 1996 and for each of the
years in the five-year period ended December 31, 1995:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
1996 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits....................................... 1.7 1.7 1.9 2.3 2.4 1.1
Including interest on deposits....................................... 1.4 1.4 1.5 1.5 1.4 1.0
</TABLE>
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 Debt 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 affiliates of NationsBank. The Prospectus Supplement
with respect to a particular offering of a series of Debt Securities will set
forth the terms of the offering of such Debt 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 Debt Securities, the public
offering or purchase price of such Debt 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,
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any discounts or concessions to be allowed or reallowed or paid to dealers and
the securities exchange, if any, on which such Debt Securities may be listed.
If underwriters are used in the offer and sale of Debt Securities, the Debt
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 Debt 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 Debt
Securities will be subject to certain conditions precedent and the underwriters
will be obligated to purchase all the Debt 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.
Debt Securities 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 Debt 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.
If so indicated in the applicable Prospectus Supplement, 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
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 Debt 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 Debt Securities are sold
by the Corporation for public offering and sale may make a market in such Debt
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 Debt Securities.
Any underwriter, dealer or agent participating in the distribution of any
Debt 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 Debt 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 Debt
Securities may be deemed to be underwriting discounts and commissions under the
1933 Act.
Under agreements entered into with the Corporation, underwriters, dealers
and 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.
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The participation of an affiliate or subsidiary of NationsBank in the offer
and sale of the Debt Securities will comply with the requirements of Section
2720 of the Conduct Rules of the National Association of Securities Dealers,
Inc. (the "NASD") regarding the participation in a distribution of securities by
an affiliate. No NASD member participating in offers and sales of the Debt
Securities will execute a transaction in the Debt Securities in a discretionary
account without the prior written specific approval of the member's customer.
This Prospectus and related Prospectus Supplements may also be used by
direct or indirect wholly-owned subsidiaries of NationsBank in connection with
offers and sales related to secondary market transactions in the Debt
Securities. Such subsidiaries may act as principal or agent in such
transactions. Any such sales will be made at prices related to prevailing market
prices at the time of sale.
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
THE FOLLOWING DESCRIPTION OF THE TERMS OF THE DEBT SECURITIES SETS FORTH
CERTAIN GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES TO WHICH ANY
PROSPECTUS SUPPLEMENT MAY RELATE. THE PARTICULAR TERMS OF THE DEBT SECURITIES
OFFERED BY ANY PROSPECTUS SUPPLEMENT AND THE EXTENT, IF ANY, TO WHICH SUCH
GENERAL PROVISIONS MAY APPLY TO THE DEBT SECURITIES SO OFFERED WILL BE DESCRIBED
IN THE PROSPECTUS SUPPLEMENT RELATING TO SUCH 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 First Trust of
New York, 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"). A copy of 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) 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 restrictions, tax
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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 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 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 Debt
Securities, including: (1) the designation of the particular series; (2) the
aggregate principal amount of such series that may be authenticated and
delivered under the applicable Indenture; (3) 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; (4) the date or dates on which the principal of the Debt Securities of
such series is payable; (5) 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; (6) 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; (7) 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; (8) 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; (9)
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; (10) 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; (11) 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; (12) if the
amount of payments of principal of (and premium, if any, on) or any interest on
the Debt Securities of the series may be determined with reference to an index,
the manner in which such amounts shall be determined; (13) whether the Debt
Securities will be issued in book-entry only form; (14) 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; (15) 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; (16) any provisions relating to the extension of
maturity of, or the renewal of, Debt Securities of such series; and (17) 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, and 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 -- Supervision and Regulation."
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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 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, the Prospectus Supplement relating to
such series of Debt Securities 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 purchaseable 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 Book-Entry Securities, see "DESCRIPTION OF DEBT SECURITIES -- Book-Entry
Securities."
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.
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<PAGE>
The Corporation 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.
BOOK-ENTRY SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series may be issued in book-entry form represented
by one or more global Debt Securities in registered form (each a "Book-Entry
Security"). Each such Book-Entry Security will be deposited with, or on behalf
of, a depositary (a "Depositary") as identified in the Prospectus Supplement
relating to such series of Debt Securities, for credit to the respective
accounts of the beneficial owners of such Debt Securities (or to such other
accounts as they may direct). The specific terms of the depositary arrangement
with respect to any such series of Debt Securities will be described in the
Prospectus Supplement relating to such series. Unless otherwise specified in the
applicable Prospectus Supplement, the Corporation anticipates that the following
provisions will apply to all depositary arrangements with a Depositary.
Upon the issuance and deposit of a Book-Entry Security, the Depositary will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the Debt Securities of the series represented by such
Book-Entry Security to the accounts of institutions that have accounts with such
Depositary or its nominee ("participants"). The accounts to be credited shall be
designated by the underwriters or agents of such Debt Securities (or by the
Corporation if such Debt Securities are offered and sold directly by the
Corporation). Ownership of beneficial interests in the Debt Securities of a
series represented by a Book-Entry Security will be limited to participants or
persons that may hold interests through participants. Ownership of a beneficial
interest in the Debt Securities of a series represented by such a Book-Entry
Security will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the Depositary or its nominee (with respect
to participants' interests) for such Book-Entry Security or by participants or
persons that hold through participants. The laws of some jurisdictions require
that certain purchasers of securities take physical delivery of such securities
in definitive form. Such limits and such laws may impair the ability to acquire
or transfer beneficial interests in the Debt Securities of a series represented
by a Book-Entry Security.
So long as the Depositary for a Book-Entry Security, or its nominee, is the
registered owner of such Book-Entry Security, such Depositary or nominee, as the
case may be, will be considered the sole owner or holder of the Debt Securities
of the series represented by such Book-Entry Security for all purposes under the
Indenture governing such Debt Securities. Except as set forth below, owners of
beneficial interests in the Debt Securities of a series represented by a
Book-Entry Security will not be entitled to have such Debt Securities registered
in their names, will not receive or be entitled to receive physical delivery of
such Debt Securities in definitive form and will not be considered the owners or
holders thereof under the Indenture. Accordingly, in order to exercise any
rights of a holder of the Debt Securities under the applicable Indenture, each
person owning a beneficial interest in the Debt Securities of a series
represented by a Book-Entry Security must rely on the procedures of the
Depositary or, if such person is not a participant, on the procedures of the
participant and, if applicable, the indirect participant, through which such
person owns its interest.
Payment of principal of (and premium, if any) and any interest on Debt
Securities of a series represented by a Book-Entry Security registered in the
name of or held by a Depositary or its nominee will be made to the Depositary or
its nominee, as the case may be, as the registered owner or the holder of the
Book-Entry Security representing such Debt Securities. None of the Corporation,
the Trustee, any paying agent, any authenticating agent or the Security
Registrar for such Debt Securities will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the Debt Securities of a series represented by a
Book-Entry Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Corporation expects that the Depositary for Debt Securities of a series
represented by a Book-Entry Security will, upon receipt of any payment of
principal of (and premium, if any) and any interest on such Debt
11
<PAGE>
Securities, credit immediately participants' accounts with payments in amounts
proportionate to their respective holdings in principal amount of beneficial
interests in the Debt Securities of the series represented by such Book-Entry
Security as shown on the records of such Depositary. The Corporation also
expects that payments by participants to owners of beneficial interests in the
Debt Securities of the series represented by such Book-Entry Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such participants.
Unless and until a Book-Entry Security is exchanged in whole for Debt
Securities in definitive form, it may not be transferred except as a whole by
the Depositary for such Book-Entry Security to a nominee of such Depositary or
to another depositary or a nominee for such other depositary. If a Depositary
for a Book-Entry Security is at any time unwilling or unable to continue as
Depositary and a successor depositary is not appointed by the Corporation within
90 days, the Corporation will issue Debt Securities in definitive form in
exchange for the Book-Entry Security or Book-Entry Securities representing all
such Debt Securities. In addition, the Corporation may at any time and in its
sole discretion determine not to have any Debt Securities represented by a
Book-Entry Security and, in such event, will issue such Debt Securities in
definitive form in exchange for the Book-Entry Security or Book-Entry Securities
representing all such Debt Securities. In any such instance, an owner of a
beneficial interest in Debt Securities of a series represented by a Book-Entry
Security will be entitled to physical delivery in definitive form of Debt
Securities of the series represented by such Book-Entry Security equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in the name of the owner of such beneficial interest.
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
interest, if any, 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 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
12
<PAGE>
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) 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.
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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 or coupons, if any, thereunder, with the consent of the holders of
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 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, determined 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 and the related coupons.
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 by the Senior
Trustee or by the holders of at least 25% in principal amount of the 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
14
<PAGE>
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 or 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 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 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
First Trust of New York, 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.
LEGAL OPINIONS
The legality of the Debt 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, New York, New York. As of
the date of this Prospectus, certain members of Smith Helms Mulliss & Moore,
L.L.P. beneficially own approximately 50,000 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, 1995, 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.
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR BY THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF. THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS DO NOT CONSTITUTE AN OFFER OR SOLICITATION
BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR
IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO
OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Description of the Notes...................... S-2
Recent Developments........................... S-3
Capitalization................................ S-4
Ratios of Earnings to Fixed Charges........... S-5
Selected Financial Data....................... S-6
Settlement and Registration................... S-7
Certain United States Federal Income Tax
Consequences to Foreign Investors........... S-10
Use of Proceeds............................... S-11
Underwriting.................................. S-11
PROSPECTUS
Incorporation of Certain Documents by
Reference................................... 2
Available Information......................... 2
NationsBank Corporation....................... 3
Use of Proceeds............................... 6
Ratios of Earnings to Fixed Charges........... 6
Plan of Distribution.......................... 6
Description of Debt Securities................ 8
Legal Opinions................................ 15
Experts....................................... 15
</TABLE>
$1,400,000,000
NATIONSBANK(Register mark)
$500,000,000 % SENIOR NOTES, DUE 2001
$550,000,000 % SUBORDINATED NOTES, DUE 2006
$350,000,000 % SUBORDINATED NOTES, DUE 2016
PROSPECTUS SUPPLEMENT
SENIOR NOTES
NATIONSBANC CAPITAL MARKETS, INC.
CHASE SECURITIES INC.
CS FIRST BOSTON
GOLDMAN, SACHS & CO.
STEPHENS INC.
SUBORDINATED NOTES
NATIONSBANC CAPITAL MARKETS, INC.
LEHMAN BROTHERS
MERRILL LYNCH & CO.
MORGAN STANLEY & CO.
INCORPORATED
UBS SECURITIES
SEPTEMBER , 1996
