Bank of America launches offering of $1,000-par fixed-to-floating rate noncumulative preferreds

By Stephanie N. Rotondo

Phoenix, March 12 – Bank of America Corp. plans to price $1,000-par series AA fixed-to-floating rate noncumulative preferred stock, the company said in a prospectus filed with the Securities and Exchange Commission on Thursday.

The preferreds are being talked in the 6.75% area, according to a trader.

BofA Merrill Lynch is the bookrunner.

The preferreds will be issued as depositary shares representing a 1/25th interest.

The dividend will be fixed until March 2025, at which time it will begin floating at Libor plus a spread. While fixed, the dividends will be payable semiannually. Once floating, the dividend will be payable quarterly.

The Charlotte, N.C.-based bank can redeem the securities on or after March 2025 at par plus accrued dividends. The company can also redeem the paper upon a regulatory capital treatment event.

The issue will not be listed on any exchange.

Proceeds will be used for general corporate purposes, which may include working capital, debt reductions or redemptions or acquisitions.

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