Bank of America plans digital return notes linked to 30-year CMS rate

By Jennifer Chiou

New York, June 16 – Bank of America Corp. plans to price 0% digital return notes due July 2017 linked to the 30-year Constant Maturity Swap rate, according to an FWP with the Securities and Exchange Commission.

If the 30-year CMS rate finishes above the upper reference rate - the initial rate plus 120 basis points - the payout at maturity will be par plus the digital return of 15% to 20%. The exact digital return will be set at pricing.

Investors will receive par if the rate finishes at or above its initial rate but below the upper reference rate.

Otherwise, the payout will be $800 per $1,000 principal amount.

The notes will price in June and settle in July.

BofA Merrill Lynch is the underwriter.

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