Bank of America plans two-year capped leveraged notes on index basket

By Susanna Moon

Chicago, May 27 - Bank of America Corp. plans to price 0% Capped Leveraged Index Return Notes due June 2012 based on a basket of three indexes, according to an FWP filing with the Securities and Exchange Commission.

The basket consists of the S&P 500 index, the Euro Stoxx 50 index and the Nikkei 225 index, each weighted at about one-third.

The payout at maturity will be par of $10.00 plus double any basket gain, up to a maximum payout of $12.00 to $12.40 per note. The exact cap will be set at pricing.

Investors will receive par if the basket falls by up to 10% and will lose 1% for every 1% decline beyond 10%.

The notes will price in June and settle in July.

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

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