Bank of America plans 20-year callable capped notes tied to CMS rates

By Susanna Moon

Chicago, June 16 - Bank of America Corp. plans to price callable capped notes due June 2030 based on the difference between the 30-year and two-year Constant Maturity Swap rates, according to a 424B2 filing with the Securities and Exchange Commission.

The coupon will be 12% for the first the first year. After that, the rate will accrue at four times the spread of the 30-year CMS rate over the two-year CMS rate, up to a maximum rate of 13% per year. Interest is payable quarterly and cannot be less than zero.

The payout at maturity will be par.

The notes will be callable at par on any interest payment date beginning June 2011.

The notes will price and settle in June.

Merrill Lynch, Pierce, Fenner & Smith Inc. is the agent.

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