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

By Marisa Wong

Madison, Wis., June 3 - Bank of America Corp. plans to price 0% autocallable market-linked step-up notes due June 2016 linked to the S&P 500 index, according to an FWP filing with the Securities and Exchange Commission.

The notes will be automatically called at par plus a premium of 8% per year if the index closes at or above its initial level on any annual observation date.

If the notes are not called and the final index level is greater than the step-up value, the payout at maturity will be par of $10 plus the index return. The step-up value is expected to be 120% to 126% of the initial index level.

If the final index level is greater than or equal to the initial level but less than or equal to the step-up value, the payout will be par plus the step-up payment, which is expected to be 20% to 26%.

Investors will be fully exposed to losses.

The exact terms will be set at pricing.

The notes are expected to price in June and settle in July.

BofA Merrill Lynch is the agent.

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