Bank of America plans to price Stars linked to S&P 500 index

By Angela McDaniels

Tacoma, Wash., Sept. 24 - Bank of America Corp. plans to price two-year 0% Strategic Accelerated Redemption Securities linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

If the index closes at or above its initial level on any of three semiannual observation dates, the notes will be automatically called and investors will receive par of $10 plus an annualized call premium of 8% to 12%. The exact call premium will be set at pricing.

If the notes are not called, the payout at maturity will be par if the final index level is at least 90% of the initial level. Otherwise, investors will lose 1% for every 1% that the index declines beyond 10%.

The notes are expected to price in October or November.

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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