Bank of America plans 12-year callable capped notes tied to CMS rates

By Susanna Moon

Chicago, June 18 - Bank of America Corp. plans to price callable capped notes due July 2022 based on 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 10% for the first year. After that, the rate will accrue at four times the spread of the 30-year CMS rate over the two-year CMS rate minus a strike of 20 to 70 basis points, up to a maximum rate of 10% per year. Interest is payable quarterly and cannot be less than zero.

The payout at maturity will be par.

The notes will be callable at par on any interest payment date beginning July 2013.

The notes will price and settle in June.

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

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