Bank of America to price principal-protected notes linked to CMS rates

By Angela McDaniels

Tacoma, Wash., May 19 - Bank of America Corp. plans to price 10-year 100% principal-protected notes linked to the 30-year and two-year Constant Maturity Swap rates, according to a 424B2 filing with the Securities and Exchange Commission.

Interest is payable quarterly and will equal 11% for the first year. Beginning in May 2010, interest will accrue at a per-year rate equal to 10 times the spread of the 30-year CMS rate over the two-year CMS rate minus the strike. The strike is expected to be 0.65% to 0.85% and will be set at pricing.

The payout at maturity will be par.

Beginning one year after issuance, the notes will be callable at par on any interest payment date.

The notes will price in May or June.

Merrill Lynch, Pierce, Fenner & Smith Inc., First Republic Securities Co., LLC and Banc of America Investment Services, Inc. are the agents.

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