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The following table summarizes Key’s securities that were in an unrealized loss position. 

## Duration of Unrealized Loss Position 

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Of the $125 million in total gross unrealized losses, $62 million relates to commercial mortgage-backed securities (“CMBS”). These CMBS are beneficial interests in securitizations of commercial mortgages that are held in the form of bonds and managed by the KeyBank Real Estate Capital line of business. This line of business is an active participant in the commercial real estate securitization market. Principal on these bonds is typically payable at the end of the bond term and interest is paid monthly at a fixed coupon rate. The fair value of these investments is sensitive to changes in the market yield on CMBS. During the time Key has held the bonds, CMBS market yields have increased, resulting in a reduction in their fair value. In accordance with EITF 99-20, Key reviews these securities on a quarterly basis for other- than-temporary impairment. Management believes the losses are temporary and will recognize any losses on bonds that are considered impaired under EITF 99-20. 

Of the remaining $63 million of gross unrealized losses at December 31, 2003, $61 million relates to fixed-rate agency collateralized mortgage obligations, which Key invests in as part of its overall asset/liability management strategy. Since these instruments have fixed interest rates, their fair value is sensitive to movements in market interest rates. During the second half of 2003, there was a general increase in mortgage interest rates. As a result, the fair value of these 63 instruments, which had a weighted-average maturity of 2.95 years at December 31, 2003, decreased below their carrying amount. 

Other mortgage-backed securities are comprised of fixed-rate mortgage- backed securities issued by the Government National Mortgage Association (“GNMA”) and had gross unrealized losses of $2 million at December 31, 2003. Similar to the fixed-rate securities discussed above, these instruments are sensitive to movements in interest rates. 

During 2003, there was a general increase in interest rates that affected the valuation of these investments. As a result, the fair value of these 26 instruments, which had a weighted-average maturity of 4.67 years at December 31, 2003, decreased. 

The unrealized losses on the securities discussed above are considered temporary since Key has the ability and intent to hold them until they mature without impacting its liquidity position. Accordingly, the carrying amount of these investments has not been reduced to their fair value. 

At December 31, 2003, securities available for sale and investment securities with an aggregate amortized cost of approximately $6.9 billion were pledged to secure public and trust deposits, securities sold under repurchase agreements, and for other purposes required or permitted by law. 

The following table shows securities available for sale and investment securities by remaining contractual maturity. Included in securities available for sale are collateralized mortgage obligations, other mortgage- backed securities and retained interests in securitizations. All of these securities are presented based on their expected average lives. 

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