Government & Corporate Bond Funds

Nations Funds
Notes to financial statements (continued) (unaudited)
7. Lines of credit
The Master Trust participates with other Nations Funds other financial institutions. Loans are collateralized by
in a $1 billion uncommitted line of credit provided by cash, in an amount at least equal to the market value of
BNY under a line of credit agreement (the the securities loaned. The cash collateral received is
‘‘Agreement’’). Advances under the Agreement are taken invested in Nations Cash Reserves. A portion of the
primarily for temporary or emergency purposes, including income generated by the investment of the collateral, net
the meeting of redemption requests that otherwise might of any rebates paid by BNY to borrowers, is remitted to
require the untimely disposition of securities. Interest on BNY as lending agent, and the remainder is paid to the
borrowings is payable at a specified Federal Funds rate Master Portfolios. Generally, in the event of counterparty
plus 0.50% on an annualized basis. Each participating default, the Master Portfolio has the right to use the
Master Portfolio maintains a ratio of net assets (not collateral to offset losses incurred. There would be a
including amounts borrowed pursuant to the Agreement) potential loss to the Master Portfolio in the event the
to the aggregate amount of indebtedness pursuant to the Master Portfolio is delayed or prevented from exercising
Agreement of no less than 4 to 1. its right to dispose of the collateral. The Master Portfolio
For the six months ended September 30, 2002,
borrowings by the Funds under the Agreement were as
follows:
bears the risk of loss with respect to the investment of
collateral.
At September 30, 2002, the following Master Portfolios
had securities on loan:
Average
amount Average Market value of Market value
outstanding interest loaned securities of collateral
Fund (000) rate (000) (000)
Intermediate Bond Master Portfolio ******* $4 2.30% Intermediate Bond Master Portfolio $175,233 $185,450
High Yield Bond Master Portfolio 55,813 60,621
8. Securities lending
Under an agreement with BNY, the Master Portfolios can
lend their securities to approved brokers, dealers and
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