Bank of America plans 20-year callable capped notes tied to CMS rates

By Susanna Moon

Chicago, Feb. 3 - Bank of America Corp. plans to price callable capped notes due Feb. 24, 2031 linked to the 30-year Constant Maturity Swap rate and two-year CMS rate, according to a 424B2 filing with the Securities and Exchange Commission.

The coupon will be 10% for the first year. After that, the rate will accrue at four times the spread of the 30-year CMS rate over the two-year CMS rate minus a strike of 25 basis points, up to a maximum coupon of 10%. Interest is payable quarterly and cannot be less than zero.

The payout at maturity will be par.

The notes will be callable at par on any interest payment date beginning on Feb. 24, 2012.

The notes (Cusip 06048WFG0) will settle on Feb. 24.

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

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