Bank of America plans market-linked step-up notes linked to S&P 500

By Marisa Wong

Madison, Wis., July 12 - Bank of America Corp. plans to price 0% autocallable market-linked step-up notes due July 2015 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

If the index level is greater than or equal to the initial level on either of two observation dates, the notes will be automatically called at par plus a call premium. The call premium is $1.00 per $10.00 note on the July 2013 observation date and $2.00 per note on the July 2014 observation date.

If the index finishes at or above the step-up value - 134% to 140% of the initial level - the payout at maturity will be par of $10.00 plus any gain.

If the index gains but finishes below the step-up value, the payout will be par of $10.00 plus $3.40 to $4.00 per note.

Investors will receive par if the index falls by up to 5% and will be exposed to any losses beyond 5%.

Bank of America Merrill Lynch is the underwriter.

The exact deal terms will be set at pricing. The notes are expected to price in July and settle in August.

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