Bank of America plans Bear Market Strategic notes linked to iShares real estate fund via Merrill

By E. Janene Geiss

Philadelphia, Jan. 5 - Bank of America Corp. plans to price 0% Bear Market Strategic Accelerated Redemption Securities due August 2010 linked to the iShares Dow Jones U.S. Real Estate Index Fund, according to a 424B3 filing with the Securities and Exchange Commission.

Merrill Lynch, Pierce, Fenner & Smith Inc. and First Republic Securities Co. are the agents.

The notes will be called at a premium of 16% to 20% per year if the closing share price of the index fund is less than its starting value on any of three observation dates. The exact premium will be set at pricing.

If the notes are not called, the payout at maturity will be par if the final fund price is less than 110% of the initial price. Otherwise, investors will lose 1% for each 1% incline beyond 110%.

The issuer has applied to list the securities on the NYSE Arca under the symbol "DMH."

The notes are expected to price in January and settle in February.

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