Merrill Lynch's 9% convertible preferreds to stay outstanding after Bank of America merger

By Angela McDaniels

Tacoma, Wash., Oct. 2 - Merrill Lynch & Co., Inc.'s 9% non-voting mandatory convertible non-cumulative preferreds, series 2 and series 3, will remain outstanding following the upcoming merger of the company with Bank of America Corp.

The preferreds will be convertible into shares of Bank of America common stock based on the exchange ratio of 0.8595, according to an S-4 registration statement filed by Bank of America with the Securities and Exchange Commission on Wednesday.

Merrill Lynch's non-convertible preferreds will be exchanged for preferreds issued by Bank of America with substantially identical terms.

The merger was announced on Sept. 15 and is expected to close in the first quarter of 2009. Merrill Lynch stockholders will receive 0.8595 of a share of Bank of America common stock for each Merrill Lynch share.

At the special meeting being held to vote on the merger, Merrill Lynch stockholders will also vote on an amendment that would give holders of the convertible preferreds 600 votes per preferred.

Bank of America is a financial holding company based in Charlotte, N.C., and Merrill Lynch is an investment bank based in New York.

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