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

By Angela McDaniels

Tacoma, Wash., Sept. 15 - Bank of America Corp. plans to price callable capped notes due October 2030 linked to 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 13% for the first year. After that, the rate will be four times the spread of the 30-year CMS rate over the two-year CMS rate minus 30 basis points, subject to a maximum of 13% per year. Interest is payable quarterly and cannot be less than zero.

The payout at maturity will be par.

Beginning in October 2011, the notes will be callable at par on any interest payment date.

The notes (Cusip: 06048WDX5) will settle in October.

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

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