Published on 7/20/2022 in the Prospect News Investment Grade Daily.
New Issue: Bank of America prices $10 billion fixed-to-floaters in three parts
By Marisa Wong and Cristal Cody
Los Angeles, July 20 – Bank of America Corp. priced $10 billion of fixed-to-floating rate senior notes (A2/A-/AA-) in three tranches on Tuesday, according to FWP filings with the Securities and Exchange Commission.
Bank of America priced $2 billion of four-year notes with an initial coupon of 4.827%. The coupon converts on July 22, 2025 to a floating rate of compounded SOFR plus 175 basis points.
The 2026 notes priced with a spread of 160 bps over Treasuries. Price talk was in the Treasuries plus 180 bps area, according to a market source.
A $3 billion tranche of six-year notes priced with an initial coupon of 4.948%. The coupon converts on July 22, 2027 to a floating rate of compounded SOFR plus 204 bps.
The 2028 notes priced with a spread of 180 bps over Treasuries. Price talk was in the Treasuries plus 205 bps area.
The company priced the final $5 billion tranche of 11-year notes with an initial coupon of 5.015%. The coupon converts on July 22, 2032 to a floating rate of compounded SOFR plus 216 bps.
The 2033 notes priced with a spread of 200 bps over Treasuries. Price talk was in the Treasuries plus 225 bps area.
All three tranches priced at par.
Each tranche features a make-whole call followed by a par call.
A floating tranche had been dropped from the offering, according to the market source.
BofA Securities, Inc. is the bookrunner.
The financial services company is based in Charlotte, N.C.
| Issuer: | Bank of America Corp.
|
| Amount: | $10 billion
|
| Issue: | Fixed-to-floating rate senior notes
|
| Bookrunner: | BofA Securities, Inc.
|
| Co-managers: | AmeriVet Securities, Inc., Cabrera Capital Markets, LLC, CastleOak Securities, LP, C.L. King & Associates, Inc., Mischler Financial Group, Inc., R. Seelaus & Co., LLC, Banco de Sabadell, SA, BBVA Securities Inc., BNY Mellon Capital Markets, LLC, Capital One Securities, Inc., CIBC World Markets Corp., Citizens Capital Markets, Inc., Danske Markets Inc., HSBC Securities (USA) Inc., Huntington Securities, Inc., ING Financial Markets LLC, Lloyds Securities Inc., Mashreqbank psc, Mizuho Securities USA LLC, MUFG, Natixis Securities Americas LLC, NatWest Markets Securities Inc., Nomura Securities International, Inc., Nordea Bank Abp, PNC Capital Markets LLC, Scotia Capital (USA) Inc., SG Americas Securities, LLC, SMBC Nikko Securities America, Inc., Standard Chartered Bank, SVB Securities LLC and UniCredit Capital Markets LLC
|
| Trade date: | July 19
|
| Settlement date: | July 22
|
| Ratings: | Moody’s: A2
|
| S&P: A-
|
| Fitch: AA-
|
| Distribution: | SEC registered
|
|
|
| 2026 notes
|
| Amount: | $2 billion
|
| Maturity: | July 22, 2026
|
| Coupon: | 4.827%, resets on July 22, 2025 to compounded SOFR plus 175 bps
|
| Price: | Par
|
| Yield: | 4.827%
|
| Spread: | Treasuries plus 160 bps
|
| Call options: | Make-whole call at Treasuries plus 25 bps in whole or in part on or after Jan. 22, 2023 and before July 22, 2025; par call in whole on July 22, 2025 or in whole or in part beginning June 18, 2026
|
| Price talk: | Treasuries plus 180 bps area
|
| Cusip: | 06051GLA5
|
|
|
| 2028 notes
|
| Amount: | $3 billion
|
| Maturity: | July 22, 2028
|
| Coupon: | 4.948%, resets on July 22, 2027 to compounded SOFR plus 204 bps
|
| Price: | Par
|
| Yield: | 4.948%
|
| Spread: | Treasuries plus 180 bps
|
| Call options: | Make-whole call at Treasuries plus 30 bps in whole or in part on or after Jan. 22, 2023 and before July 22, 2027; par call in whole on July 22, 2027 or in whole or in part beginning June 21, 2028
|
| Price talk: | Treasuries plus 205 bps area
|
| Cusip: | 06051GKW8
|
|
|
| 2033 notes
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| Amount: | $5 billion
|
| Maturity: | July 22, 2033
|
| Coupon: | 5.015%, resets on July 22, 2032 to compounded SOFR plus 216 bps
|
| Price: | Par
|
| Yield: | 5.015%
|
| Spread: | Treasuries plus 200 bps
|
| Call options: | Make-whole call at Treasuries plus 30 bps in whole or in part on or after Jan. 22, 2023 and before July 22, 2032; par call in whole on July 22, 2032 or in whole or in part beginning April 22, 2033
|
| Price talk: | Treasuries plus 225 bps area
|
| Cusip: | 06051GKY4
|
|
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