Bank of America plans autocallable step-up notes on PHLX Housing

By Toni Weeks

San Luis Obispo, Calif., July 2 - Bank of America Corp. plans to price 0% autocallable market-linked step-up notes due July 2015 tied to the PHLX Housing Sector index, according to an FWP filing with the Securities and Exchange Commission.

The notes will be called at par plus a 10% call premium if the index is at or greater than the initial level on the observation date, which is expected to be in August 2014.

If the notes are not called and the index finishes above the step-up value - 124% to 130% of the initial level - the payout at maturity will be par of $10 plus the index return.

If the index finishes at or above the initial level but is less than or equal to the step-up value, the payout at maturity will be par of $10 plus the step-up payment of 24% to 30%.

Investors will receive par if the index falls by up to 5% and will lose 1% for every 1% decline in the index beyond 5%.

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

BofA Merrill Lynch is the underwriter.

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