Bank of America to price Relative Value Stars linked to equity, Treasury bond long-short index

By Angela McDaniels

Tacoma, Wash., Feb. 28 - Bank of America Corp. plans to price one-year 0% Relative Value Strategic Accelerated Redemption Securities linked to the SPDR S&P 500 ETF Trust/iShares Barclays 20+ Year Treasury Bond Fund Long-Short index, according to an FWP filing with the Securities and Exchange Commission.

The level of the index will increase when the performance of the SPDR S&P 500 ETF trust exceeds the performance of the iShares Barclays 20+ Year Treasury Bond fund, and it will decrease when the performance of the Treasury fund exceeds the performance of equity fund.

If the index closes at or above the initial index level on any of three call observation dates, the notes will be called at par of $10 plus a premium of 11% to 15% per year. The observation dates are expected to fall in September 2011, December 2011 and March 2012. The exact premium and dates will be set at pricing.

If the notes are not called, the payout at maturity will be par plus the index level. Because the last call observation date is also the final valuation date, if the notes are not called, the index return will be negative and investors will lose principal at maturity.

The notes will price in March or April.

Merrill Lynch, Pierce, Fenner & Smith Inc. is the agent.

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