Bank of America begins exchange offer for nine series of preferreds

By Angela McDaniels

Tacoma, Wash., May 28 - Bank of America Corp. has begun an offer to exchange up to 200 million shares of common stock for depositary shares of some of its preferred stock, according to a company news release.

The offer will expire at midnight ET on June 24.

The preferreds eligible for exchange, their acceptance priority levels and the consideration per depositary share are noted in the table below.

The number of shares of common stock issuable for each exchanged depositary share will be equal to the consideration amount divided by the average of the daily per-share volume-weighted average price of Bank of America common stock for the five consecutive trading days ending June 22.

One of the conditions of the exchange offer is that the common stock average price must be $10.00 or greater.

If the offer is oversubscribed, the acceptance of tendered depositary shares will be based on their priority levels, and the depositary shares may be subject to proration.

The offer is part of Bank of America's plan to exchange common stock for non-government perpetual preferreds in order to meet its $33.9 billion indicated Supervisory Capital Assessment Program buffer set by the Federal Reserve.

The company said the exchange offer would increase its tier 1 common capital by an amount equal to the total liquidation preference of the depositary shares exchanged.

As previously reported, Bank of America said on May 27 that it entered into agreements with some holders to exchange their $5.9 billion of non-government perpetual preferreds for 436,246,905 shares of common stock, which will result in a total benefit to tier 1 common capital of $5.9 billion.

The preferreds covered by that agreement include the bank's 7.25% non-cumulative perpetual convertible preferreds, series L; fixed-to-floating rate non-cumulative preferreds, series K; fixed-to-floating rate non-cumulative preferreds, series M; floating-rate non-cumulative preferreds, series 4; 6.204% non-cumulative preferreds, series D; and 6.25% non-cumulative perpetual preferreds, series 7.

D.F. King & Co., Inc. (800 829-6551 or 212 269-5550) is the information agent for the tender offer.

Bank of America is a Charlotte, N.C.-based financial services company.

Bank of America exchange offer

Preferred stock series Consideration amount Acceptance priority level

Floating-rate non-cumulative preferreds, series E $16.25 1

Floating-rate non-cumulative preferreds, series 5 $16.25 2

Floating-rate non-cumulative preferreds, series 1 $15.00 3

Floating-rate non-cumulative preferreds, series 2 $15.00 4

6.375% non-cumulative preferreds, series 3 $17.00 5

6.625% non-cumulative preferreds, series I $17.50 6

7.25% non-cumulative preferreds, series J $18.75 7

8.20% non-cumulative preferreds, series H $20.50 8

8.625% non-cumulative preferreds, series 8 $21.00 9

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