Bank of America to sell $6 billion in straight, convertible perpetual preferreds

By Evan Weinberger

New York, Jan. 23 - Bank of America Corp. (NYSE: BAC) announced an offering of $6 billion divided between two securities Wednesday afternoon.

One issue would be of depository shares representing 1/25 of a share of non-cumulative perpetual preferred stock, series K. The other coming issue is of perpetual non-cumulative convertible preferred stock, series L.

The allocations to each issue will be decided at launch.

The convertible preferreds are talked at a 7.25% to 7.75% dividend and a 20% to 25% initial conversion premium.

The convertible preferreds will be callable beginning Jan. 1, 2013 subject to a 130% hurdle.

They carry fundamental change protection in the form of a make-whole agreement. There is also a provision for anti-dilution adjustments.

Banc of America Securities will be the bookrunner of the convertible offering and the straight preferreds. Additional managers will be added to the straight preferreds.

The convertibles are expected to price Thursday after the close.

The depository shares will have a liquidation preference of $1,000, making the liquidation preference for the straight preferred shares $25,000.

The convertible preferreds will have a $1,000 liquidation preference.

Charlotte, N.C.-based Bank of America plans to use the proceeds for general corporate purposes.

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