Filed Pursuant to Rule 424(b)(5)
File Number 333-51367
PROSPECTUS SUPPLEMENT
- ---------------------
(To Prospectus dated May 21, 1998)
$450,000,000
[NATIONSBANK LOGO APPEARS HERE]
6 1/8% Senior Notes, due 2004
--------------
Interest on the 6 1/8% Senior Notes, due 2004 (the "Notes") will be
payable by NationsBank Corporation ("NationsBank" or the "Corporation")
semiannually on January 15 and July 15, commencing January 15, 1999. The Notes
will mature on July 15, 2004 and are not redeemable prior to maturity. The
Notes 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 global securities (the "Global Notes") registered in the name of
The Depository Trust Company ("DTC"), as depositary, or its nominee. Except as
described herein, the Notes will not be issued in definitive form. The Notes
will be available for purchase in denominations of $1,000 and integral
multiples thereof. Settlement of the Notes will be made in immediately
available funds. So long as the Notes are represented by Global Notes
registered in the name of DTC, the Notes will trade in DTC's Same-Day Funds
Settlement System and secondary market trading activity in the Notes will
therefore settle in immediately available funds; however, settlements involving
Cedel Bank, soci-t- anonyme ("Cedel Bank") or Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euroclear System (the "Euroclear
Operator" or "Euroclear") and DTC will be dated the business day following the
DTC settlement date. See "REGISTRATION AND SETTLEMENT" herein and in the
accompanying Prospectus.
--------------
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR BANK 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.
--------------
THIS PROSPECTUS SUPPLEMENT ALSO MAY BE USED BY NATIONSBANC MONTGOMERY
SECURITIES LLC ("NMS"), A BROKER-DEALER AND DIRECT WHOLLY-OWNED SUBSIDIARY OF
NATIONSBANK, IN CONNECTION WITH OFFERS AND SALES RELATED TO SECONDARY MARKET
TRANSACTIONS IN THE NOTES. NMS OR ITS AFFILIATES MAY ACT AS PRINCIPAL OR AGENT
IN SUCH TRANSACTIONS. ANY SUCH SALES WILL BE MADE AT NEGOTIATED PRICES RELATING
TO PREVAILING MARKET PRICES AT THE TIME OF SALE OR OTHERWISE.
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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Price to Underwriting Proceeds to the
Public (1) Discount (2) Corporation (1) (3)
---------- ------------ -------------------
Per Note ......... 99.883% .55% 99.333%
Total ............ $449,473,500 $2,475,000 $446,998,500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Plus accrued interest, if any, from July 23, 1998.
(2) The Corporation has agreed to indemnify 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
$250,000.
--------------
The Notes are offered by the Underwriters, 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
Underwriters reserve the right to reject any order in whole or in part. It is
expected that delivery of the Notes will be made through the facilities of DTC,
Cedel Bank and Euroclear on July 23, 1998.
--------------
NationsBanc Montgomery Securities LLC
BancAmerica Robertson Stephens
Bear, Stearns & Co. Inc.
Lehman Brothers
--------------
The date of this Prospectus Supplement is July 14, 1998.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE 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. SEE
"UNDERWRITING."
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 issued in the aggregate principal amount of $450,000,000
under an Indenture (the "Indenture") dated as of January 1, 1995 between the
Corporation and U.S. Bank Trust National Association (successor to BankAmerica
National Trust Company), as trustee, as set forth in the accompanying
Prospectus. The Notes will be available for purchase in denominations of $1,000
and integral multiples thereof. The Notes are unsecured and constitute a single
series of debt securities under the Indenture. The Notes will bear interest
from July 23, 1998 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 January 15 and July 15, commencing January 15, 1999. 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 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 or a legal holiday in
New York, New York or Charlotte, North Carolina, that 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. 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, who has been
appointed as authenticating and paying agent, registrar and transfer agent for
the Notes. The Notes will mature on July 15, 2004 and are not redeemable prior
to maturity. No sinking fund is provided for the Notes. There is no limitation
in the Indenture on the amount of Senior Indebtedness (as described in the
Prospectus) or other obligations which may be issued by the Corporation.
RECENT DEVELOPMENTS
Merger Agreement with BankAmerica Corporation
NationsBank and BankAmerica Corporation, a Delaware corporation
("BankAmerica"), have entered into an Agreement and Plan of Reorganization
dated as of April 10, 1998 (the "Merger Agreement"), under which (i) the
Corporation will form a new Delaware subsidiary ("NationsBank (DE)") and will
merge (the "Reincorporation Merger") with and into NationsBank (DE), with
NationsBank (DE) as the surviving corporation in the Reincorporation Merger,
and (ii) BankAmerica will thereafter merge (the "Merger," and together with the
Reincorporation Merger, the "Reorganization") with and into NationsBank (DE),
with NationsBank (DE) as the surviving corporation in the Merger. Consummation
of the Reorganization is subject to various conditions. For additional
information regarding the Reorganization, see the Corporation's Current Report
on Form 8-K filed April 17, 1998 (amended by Form 8-K/A-1 filed April 24, 1998
and Form 8-K/A-2 filed May 18, 1998) incorporated herein by reference.
S-2
<PAGE>
Recent NationsBank Financial Information
Second quarter 1998 net income for NationsBank was $1.41 billion, or $1.47
per share, which included a $430 million gain on the sale of 67 banking offices
in Florida arising from the merger (the "Barnett Merger") with Barnett Banks,
Inc. ("Barnett"). Excluding the gain on the sale of the banking offices in
Florida, operating earnings were $1.13 billion, or $1.18 per share. Net income
in the second quarter of 1997 was $919 million, or $.97 per share.
Taxable-equivalent net interest income of $2.56 billion in the second
quarter of 1998 represented a 4% increase compared to $2.47 billion in the same
period of 1997.
Noninterest income in the second quarter of 1998 was $1.86 billion, or 31%
higher than $1.42 billion in the comparable 1997 quarter.
Second quarter noninterest expense was $2.51 billion compared to second
quarter 1997 noninterest expense of $2.23 billion.
The provision for credit losses increased to $265 million in the second
quarter of 1998 from $225 million in the second quarter of 1997.
Net charge-offs were $276 million in the second quarter of 1998, or .61%
of average net loans, leases and factored accounts receivable, compared to $220
million, or .49% of average levels, in the second quarter of 1997. The
allowance for credit losses was $3.21 billion at June 30, 1998, or 1.78% of net
loans, leases and factored accounts receivable, compared to $3.28 billion, or
1.85% of net loans, leases and factored accounts receivable, at December 31,
1997. The allowance represented 248% of nonperforming loans at June 30, 1998
compared to 270% at December 31, 1997.
Total nonperforming assets were $1.44 billion at June 30, 1998, or .80% of
net loans, leases, factored accounts receivable and foreclosed properties,
compared to $1.36 billion, or .77%, at December 31, 1997.
Average deposits were $169.58 billion in the second quarter of 1998
compared to $167.76 billion in the same period in 1997.
Average earning assets were $269.83 billion for the second quarter of
1998, of which net loans and leases were $178.96 billion and securities were
$47.17 billion, compared to average earning assets of $244.43 billion for the
second quarter of 1997.
Total shareholders' equity was $26.67 billion at June 30, 1998, or 8.66%
of total assets, compared to $24.75 billion, or 7.97% of total assets, at
December 31, 1997. Return on average common shareholders' equity was 22.75% in
the second quarter of 1998, up from 15.68% in the same year ago quarter.
Excluding the gain on the sale of the banking offices in Florida, return on
average common shareholders' equity was 18.27%.
At June 30, 1998, the Corporation's Tier 1 and total risk-based capital
ratios were 7.30% and 11.77%, respectively. The Corporation's leverage ratio
was 6.21% at June 30, 1998.
S-3
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of the
Corporation and its subsidiaries as of March 31, 1998 and as adjusted to give
effect to (i) the issuance of the Notes; and (ii) the issuance and the maturity
of certain of the Corporation's and its subsidiaries' notes during the period
beginning April 1, 1998 through the date of this Prospectus Supplement.
<TABLE>
<CAPTION>
NationsBank As
Actual Adjusted
------------- ---------
(Amounts in millions)
<S> <C> <C>
LONG-TERM DEBT:
Senior debt
NationsBank Corporation ...................................................... $11,104 $12,441
6 1/8% Senior Notes, due 2004 ................................................ -- 449
Subsidiaries (1) ............................................................. 9,779 10,994
------- -------
Total senior debt .......................................................... 20,883 23,884
------- -------
Subordinated debt
NationsBank Corporation ...................................................... 7,866 8,216
Subsidiaries (1) ............................................................. 308 308
------- -------
Total subordinated debt .................................................... 8,174 8,524
------- -------
Total long-term debt ....................................................... 29,057 32,408
------- -------
Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Notes (2) ................................................ 2,705 2,705
SHAREHOLDERS' EQUITY:
Preferred stock, authorized -- 45,000,000 shares; issued -- 2,133,560 shares .. 91 91
Common stock, authorized -- 1,250,000,000 shares; issued -- 955,198,552 shares 10,202 10,202
Retained earnings ............................................................. 14,724 14,724
Other, including loan to ESOP trust ........................................... 203 203
------- -------
Total shareholders' equity ................................................. 25,220 25,220
------- -------
$56,982 $60,333
======= =======
</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) The line item "Guaranteed Preferred Beneficial Interests in Corporation's
Junior Subordinated Notes" reflects the issuance of $2,715 million
aggregate liquidation amount of preferred undivided beneficial interests
in the assets of seven wholly owned grantor trusts. The sole assets of the
trusts are junior subordinated notes of the Corporation.
As of March 31, 1998, the Corporation had $3.2 billion of commercial paper
and other short-term notes payable outstanding. At March 31, 1998, 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 three months ended March 31, 1998 and each of the years in the five-year
period ended December 31, 1997:
<TABLE>
<CAPTION>
Year Ended
Three Months December 31,
Ended --------------------------------------------
March 31, 1998 1997 1996 1995 1994 1993
--------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits ......... 1.5 2.0 2.0 1.8 2.0 2.6
Including interest on deposits ......... 1.3 1.5 1.5 1.4 1.5 1.6
</TABLE>
S-4
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data for the five years ended December
31, 1997 are derived from financial statements of the Corporation audited by
PricewaterhouseCoopers LLP, independent accountants. The financial data for the
three months ended March 31, 1998 and 1997 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 three
months ended March 31, 1998 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>
Three Months
Ended March 31,
---------------------------
1998 1997
------------ --------------
(Amounts in millions except
per share information and
ratios)
<S> <C> <C>
Income statement
Interest income ................................................ $ 5,269 $ 4,781
Interest expense ............................................... 2,739 2,368
Net interest income (taxable-equivalent) ....................... 2,564 2,444
Net interest income ............................................ 2,530 2,413
Provision for credit losses .................................... 265 222
Gains (losses) on sales of securities .......................... 152 43
Noninterest income ............................................. 1,776 1,321
Foreclosed properties expense (income) ......................... 5 (2)
Merger and restructuring items ................................. 900 --
Other noninterest expense ...................................... 2,452 2,225
Income before taxes and effect of change in method of
accounting for income taxes ................................... 836 1,332
Income tax expense ............................................. 339 477
Income before effect of change in method of
accounting for income taxes ................................... 497 855
Effect of change in method of accounting for income taxes ...... -- --
Net income ..................................................... 497 855
Net income available to common shareholders .................... 495 851
Net income (excluding merger and restructuring items) .......... 1,139 855
Average common shares issued (in thousands) .................... 949,641 945,184
Per common share
Earnings before effect of change in method of accounting
for income taxes .............................................. $ .52 $ .90
Earnings ....................................................... .52 .90
Earnings (excluding merger and restructuring items) ............ 1.20 .90
Diluted earnings ............................................... .51 .88
Diluted earnings (excluding merger and restructuring items)..... 1.17 .88
Cash dividends paid ............................................ .38 .33
Shareholders' equity (period-end) .............................. 26.34 24.94
Balance sheet (period-end)
Total loans, leases and factored accounts receivable,
net of unearned income ........................................ 179,486 179,575
Total assets ................................................... 314,503 280,755
Total deposits ................................................. 170,046 170,664
Long-term debt ................................................. 29,547 26,306
Common shareholders' equity .................................... 25,160 23,400
Total shareholders' equity ..................................... 25,220 23,525
Performance ratios
Return on average assets........................................ .64% 1.22%
Return on average assets (excluding merger and
restructuring items) .......................................... 1.47 1.22
Return on average common shareholders' equity (1) .............. 8.28 14.69
Return on average common shareholders' equity
(excluding merger and restructuring items) (1) ................ 19.01 14.69
Efficiency ratio ............................................... 56.50 59.09
Total equity to total assets ................................... 8.02 8.38
Risk-based capital ratios (period-end) (2)
Tier 1 ......................................................... 6.80 7.06
Total .......................................................... 11.19 11.58
Leverage capital ratio ......................................... 5.64 6.19
Cash basis financial data (3)
Earnings per common share ...................................... $ .67 $ 1.02
Earnings per common share (excluding merger and
restructuring items) .......................................... 1.34 1.02
Diluted earnings per common share .............................. .65 .99
Diluted earnings per common share (excluding merger and
restructuring items) .......................................... 1.31 .99
Return on average tangible assets .............................. .85% 1.43%
Return on average tangible assets (excluding merger and
restructuring items) .......................................... 1.70 1.43
Return on average tangible common shareholders' equity (1) ..... 18.68 26.37
Return on average tangible common shareholders' equity
(excluding merger and restructuring items) (1) ................ 37.60 26.37
Efficiency ratio ............................................... 53.30 56.09
Ending tangible equity to tangible assets ...................... 4.87 5.29
<CAPTION>
Year Ended December 31,
---------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ------------ ----------- ------------
(Amounts in millions except per share information and ratios)
<S> <C> <C> <C> <C> <C>
Income statement
Interest income ................................................ $19,687 $16,832 $16,186 $13,084 $10,858
Interest expense ............................................... 9,970 8,608 8,992 6,239 4,570
Net interest income (taxable-equivalent) ....................... 9,848 8,335 7,338 6,983 6,423
Net interest income ............................................ 9,717 8,224 7,194 6,845 6,288
Provision for credit losses .................................... 954 760 505 384 550
Gains (losses) on sales of securities .......................... 155 86 34 (26) 82
Noninterest income ............................................. 5,929 4,408 3,787 3,153 2,702
Foreclosed properties expense (income) ......................... 9 21 30 5 170
Merger and restructuring items ................................. 374 118 -- -- 30
Other noninterest expense ...................................... 9,234 7,283 6,670 6,290 5,703
Income before taxes and effect of change in method of
accounting for income taxes ................................... 5,230 4,536 3,810 3,293 2,619
Income tax expense ............................................. 1,898 1,597 1,327 1,115 897
Income before effect of change in method of
accounting for income taxes ................................... 3,332 2,939 2,483 2,178 1,722
Effect of change in method of accounting for income taxes ...... -- -- -- -- 200
Net income ..................................................... 3,332 2,939 2,483 2,178 1,922
Net income available to common shareholders .................... 3,321 2,922 2,459 2,150 1,894
Net income (excluding merger and restructuring items) .......... 3,596 3,016 2,483 2,178 1,942
Average common shares issued (in thousands) .................... 941,992 820,945 773,799 782,255 749,122
Per common share
Earnings before effect of change in method of accounting
for income taxes .............................................. $ 3.53 $ 3.56 $ 3.18 $ 2.75 $ 2.26
Earnings ....................................................... 3.53 3.56 3.18 2.75 2.53
Earnings (excluding merger and restructuring items) ............ 3.81 3.65 3.18 2.75 2.55
Diluted earnings ............................................... 3.44 3.50 3.10 2.70 2.48
Diluted earnings (excluding merger and restructuring items)..... 3.71 3.59 3.10 2.70 2.51
Cash dividends paid ............................................ 1.37 1.20 1.04 .94 .82
Shareholders' equity (period-end) .............................. 26.15 21.23 20.59 17.75 16.19
Balance sheet (period-end)
Total loans, leases and factored accounts receivable,
net of unearned income ........................................ 176,778 153,041 147,519 131,892 117,937
Total assets ................................................... 310,554 226,949 228,852 210,882 196,017
Total deposits ................................................. 173,643 140,329 134,925 135,579 123,747
Long-term debt ................................................. 28,890 24,212 18,966 9,265 9,034
Common shareholders' equity .................................... 24,684 16,956 15,933 13,895 12,518
Total shareholders' equity ..................................... 24,747 17,079 16,073 14,145 12,853
Performance ratios
Return on average assets........................................ 1.16% 1.22% 1.08% 1.07% 1.00%
Return on average assets (excluding merger and
restructuring items) .......................................... 1.25 1.25 1.08 1.07 1.01
Return on average common shareholders' equity (1) .............. 14.12 17.74 16.91 16.23 15.23
Return on average common shareholders' equity
(excluding merger and restructuring items) (1) ................ 15.25 18.21 16.91 16.23 15.41
Efficiency ratio ............................................... 58.5 57.1 60.0 62.1 62.5
Total equity to total assets ................................... 7.97 7.53 7.02 6.71 6.56
Risk-based capital ratios (period-end) (2)
Tier 1 ......................................................... 6.50 7.76 7.24 7.43 7.41
Total .......................................................... 10.89 12.66 11.58 11.47 11.73
Leverage capital ratio ......................................... 5.57 7.09 6.27 6.18 6.00
Cash basis financial data (3)
Earnings per common share ...................................... $ 4.06 $ 3.78 $ 3.40 $ 2.95 $ 2.71
Earnings per common share (excluding merger and
restructuring items) .......................................... 4.34 3.87 3.40 2.95 2.73
Diluted earnings per common share .............................. 3.96 3.71 3.32 2.90 2.66
Diluted earnings per common share (excluding merger and
restructuring items) .......................................... 4.23 3.80 3.32 2.90 2.68
Return on average tangible assets .............................. 1.38% 1.30% 1.17% 1.15% 1.09%
Return on average tangible assets (excluding merger and
restructuring items) .......................................... 1.47 1.34 1.17 1.15 1.10
Return on average tangible common shareholders' equity (1) ..... 27.51 22.31 21.32 19.89 18.56
Return on average tangible common shareholders' equity
(excluding merger and restructuring items) (1) ................ 29.41 22.86 21.32 19.89 18.76
Efficiency ratio ............................................... 55.3 55.7 58.4 60.5 61.0
Ending tangible equity to tangible assets ...................... 4.73 6.44 6.09 5.81 5.83
</TABLE>
S-5
<PAGE>
<TABLE>
<CAPTION>
Three Months
Ended March 31,
---------------------
1998 1997
---------- ----------
(Amounts in millions
except per share
information and
ratios)
<S> <C> <C>
Asset quality ratios
Allowance for credit losses as a percentage of loans, leases
and factored accounts receivable, net of unearned income
(period-end) ................................................. 1.81% 1.82%
Allowance for credit losses as a percentage of nonperforming
loans (period-end) ........................................... 233.89 263.99
Net charge-offs as a percentage of average loans, leases and
factored accounts receivable, net of unearned income ......... .63 .49
Nonperforming assets as a percentage of loans, leases and
factored accounts receivable, net of unearned income, and
foreclosed properties (period-end) ........................... .86 .81
<CAPTION>
Year Ended December 31,
------------------------------------------------------
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
(Amounts in millions except per share information and
ratios)
<S> <C> <C> <C> <C> <C>
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% 1.82% 1.81% 2.04% 2.28%
Allowance for credit losses as a percentage of nonperforming
loans (period-end) ........................................... 270.05 258.52 304.57 268.16 188.45
Net charge-offs as a percentage of average loans, leases and
factored accounts receivable, net of unearned income ......... .53 .49 .39 .33 .52
Nonperforming assets as a percentage of loans, leases and
factored accounts receivable, net of unearned income, and
foreclosed properties (period-end) ........................... .77 .83 .74 1.08 1.89
</TABLE>
- ---------
(1) Average common shareholders' equity does not include the effect of market
value adjustments to securities available for sale and marketable equity
securities.
(2) Capital ratios for periods prior to January 9, 1998 included herein have
not been restated to reflect the Barnett Merger. Under regulatory
guidelines, Barnett was considered well capitalized at the end of each
period presented herein.
(3) Cash basis calculations exclude intangible assets and the related
amortization expense.
REGISTRATION AND SETTLEMENT
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 Funds 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. Settlements involving Cedel Bank or Euroclear and a DTC
Participant will be dated the following business day. See "REGISTRATION AND
SETTLEMENT -- Cedel Bank and Euroclear" in the accompanying Prospectus.
Book-Entry System
The Notes will be issued in book-entry form only and will be represented
by one or more Global Notes 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 described in the accompanying Prospectus) and Euroclear
Participants (as described in the accompanying Prospectus), respectively,
through customers' securities accounts in Cedel Bank's and Euroclear's names,
respectively, on the books of their respective depositories, which, in turn,
will hold such positions on the books of DTC.
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 (or in certain cases a 31% backup 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
S-6
<PAGE>
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 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 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.
As used herein, the term "U.S. Person" means a holder of a Note that for
U.S. federal income tax purposes is (i) a citizen or resident of the U.S., (ii)
a corporation, partnership, or other entity treated as such that is created or
organized in or under the laws of the U.S. or of any state thereof (including
Washington, D.C.), (iii) an estate whose income from sources without the United
States is includible in gross income for U.S. federal income tax purposes
regardless of a connection with the conduct of a trade or business within the
United States, or (iv) any trust with respect to which (A) a U.S. court is able
to exercise primary supervision over the administration of such trust and (B)
one or more U.S. persons have the authority to control all substantial
decisions of the trust.
Recently issued Treasury regulations (the "Final Withholding
Regulations"), which are generally effective with respect to payments made
after December 31, 1998, consolidate and modify the current certification
requirements and means by which a holder may claim exemption from the U.S.
federal income tax withholding and provide certain presumptions regarding the
status of holders when payment to the holders cannot be reliably associated
with appropriate documentation provided to the payer. To avoid backup
withholding with respect to payments made after December 31, 1998, holders of
Notes will be required to provide certification, if applicable, that complies
with the procedures in the Final Withholding Regulations by the first payment
date after the effective date of those regulations, subject to certain
transitional rules which may extend until December 31, 1999 certifications
previously provided in accordance with the currently effective Treasury
regulations. Because the application of the Final Withholding Regulations will
vary depending on a holder's particular circumstances, all holders are urged to
consult their own tax advisors regarding the application of the Final
Withholding Regulations to them.
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.
S-7
<PAGE>
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
dated July 14, 1998 (the "Underwriting Agreement") among the Corporation and
the underwriters named therein (the "Underwriters"), the Corporation has agreed
to sell to each of the Underwriters and each of the Underwriters has severally
agreed to purchase the principal amount of the Notes set forth opposite its
name below at the price set forth on the cover page of this Prospectus
Supplement. The Underwriters are committed to purchase all the Notes offered
hereby if any of the Notes are purchased.The Underwriting Agreement provides
that settlement will occur on July 23, 1998.
Principal
Amount of
Underwriter the Notes
- ---------------------------------------------------- ---------------
NationsBanc Montgomery Securities LLC ......... $112,500,000
BancAmerica Robertson Stephens ................ 112,500,000
Bear, Stearns & Co. Inc. ...................... 112,500,000
Lehman Brothers Inc. .......................... 112,500,000
------------
Total .................................... $450,000,000
============
The Underwriters have advised the Corporation that they propose initially
to offer the 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 .35% of the principal amount of the Notes. The
Underwriters may allow, and such dealers may reallow, a discount not in excess
of .25% of such principal amount on sales to certain other dealers. After the
initial public offering, the public offering price, concession and discount may
be changed.
The Underwriting Agreement provides that the Corporation will indemnify
the Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended, or contribute to payments the Underwriters
may be required to make in respect thereof.
The Notes are a new issue of securities with no established trading
market. The Corporation does not intend to apply for listing of the Notes on
any securities exchange. The Corporation has been advised by the Underwriters
that they may make a market in the Notes. The Underwriters, however, are not
obligated to make a market in the Notes and may discontinue any market making
at any time without notice. The Corporation cannot provide any assurance that a
secondary market for the Notes will develop.
In connection with the offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Notes. Specifically, the Underwriters may overallot the offering, creating a
syndicate short position. Underwriters may bid for and purchase the Notes in
the open market to cover syndicate short positions or to stabilize the price of
the Notes. These activities may stabilize or maintain the price of the Notes at
a level above that which might otherwise prevail in the open market. None of
the transactions described in this paragraph is required, and, if any is
undertaken, it may be discontinued at any time.
NationsBanc Montgomery Securities LLC ("NMS") 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 NMS, 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 NMS. Accordingly,
the offer and sale of any Notes by NMS will comply with the requirements of
Section 2720 regarding the underwriting of securities of affiliates. 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. The offer
will also comply with any restrictions that may be imposed on NMS by the Board
of Governors of the Federal Reserve System.
Following the initial distribution of the Notes, NMS or other affiliates
of the Corporation may offer and sell the Notes in the course of their business
as a broker-dealer and may act as principal, agent or remarketing agent in such
transactions. This Prospectus Supplement may be delivered in connection with
such transactions. Any such sales will be made at negotiated prices relating to
prevailing market prices at the time of sale.
BancAmerica Robertson Stephens is a wholly owned subsidiary of
BankAmerica. See "RECENT DEVELOPMENTS -- Merger Agreement with BankAmerica
Corporation."
Each of the Underwriters or their affiliates provides or has provided
investment or commercial banking services to NationsBank from time to time in
the ordinary course of business.
S-8
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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. This Prospectus Supplement and Prospectus also
are to be used by NationsBanc Montgomery Securities LLC, a broker-dealer and a
direct wholly-owned subsidiary of the Corporation, in connection with offers
and sales related to secondary market transactions.
--------------------------------
TABLE OF CONTENTS
Page
Prospectus Supplement -----
Description of the Notes .................... S-2
Recent Developments ......................... S-2
Capitalization .............................. S-4
Ratios of Earnings to Fixed Charges ......... S-4
Selected Financial Data ..................... S-5
Registration and Settlement ................. S-6
Certain United States Federal Income
Tax Consequences to Foreign
Investors ................................ S-6
Underwriting ................................ S-8
Prospectus
Incorporation of Certain Documents by
Reference ................................ 2
Available Information ....................... 2
NationsBank Corporation ..................... 3
Use of Proceeds ............................. 6
Ratios of Earnings to Fixed Charges ......... 7
Plan of Distribution ........................ 7
Description of Debt Securities .............. 9
Description of Warrants ..................... 15
Description of Units ........................ 17
Registration and Settlement ................. 17
Legal Opinions .............................. 21
Experts ..................................... 21
$450,000,000
[NATIONSBANK LOGO APPEARS HERE]
6 1/8% Senior Notes,
due 2004
--------------------------------
PROSPECTUS SUPPLEMENT
--------------------------------
NationsBanc Montgomery Securities LLC
BancAmerica Robertson Stephens
Bear, Stearns & Co. Inc.
Lehman Brothers
July 14, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
