Terms

Series

Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series K

Liquidation Preference

$1,000.00

Coupon Rate

8%

Rate Type

Fixed To Floating

Annual Dividend

$80.00

Payment Frequency

Semi Annual

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

January 30, 2018

First Call Price

$1,000.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Indebtedness And Non-Equity Claims, Subsidiary Creditors; Pari Passu With: Series B Preferred Stock, Series D Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, Series I Preferred Stock, Series J Preferred Stock, Series L Convertible Preferred Stock; Senior To: Common Stock, Junior Stock

Regulatory (Basel III) Call

No

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.04

Shares Offered

6,000,000

Prospectus Summary

Bank of America Corporation is offering 6,000,000 depositary shares (each representing a 1/25th interest in one share of its Series K Fixed-to-Floating Rate Non-Cumulative Preferred Stock), with a liquidation preference of $1,000 per depositary share and a par value of $0.01 per underlying preferred share. From issuance through January 29, 2018, the stock pays a fixed 8.00% per annum ($80/depositary share annually), payable semi-annually on January 30 and July 30; thereafter it converts to a floating rate of three-month LIBOR plus 363 basis points, paid quarterly. The stock is perpetual with a first optional call date of January 30, 2018 at par. Critically, dividends are non-cumulative — if the board does not declare a dividend for any period, that payment is permanently forfeited with no obligation to make it up. The Series K Preferred Stock sits above Bank of America's common stock and all other junior equity in the capital stack but is subordinate to all of the corporation's existing and future indebtedness and to the prior claims of subsidiary creditors. Because Bank of America is a holding company that operates through its bank subsidiaries, holders are structurally subordinated to all liabilities at the subsidiary level — a meaningful consideration in liquidation. The Series K ranks pari passu with Series B, D, E, F, G, I, J, and L preferred stock. There is no explicit Tier 1 regulatory capital call provision in this prospectus; however, any redemption requires prior Federal Reserve Board approval, and the indentures governing BofA's junior subordinated notes separately prohibit preferred dividends or redemptions if interest on those notes has been deferred or an event of default has occurred. At the $1,000 offering price, the fixed-period yield is 8.00% annually. During the fixed rate period, dividends are paid semi-annually on January 30 and July 30 (first payment July 30, 2008); after January 30, 2018, payments switch to quarterly on January 30, April 30, July 30, and October 30. The record date is set by the board, not to exceed 30 days before each payment date. Distributions are expected to qualify for the 15%/20% preferential QDI rate for non-corporate holders and the dividends-received deduction for corporate holders, provided Bank of America has sufficient current or accumulated earnings and profits — a condition the prospectus notes may not always be met. The dividend stopper prevents BofA from paying any dividends on common stock or repurchasing junior stock during a period in which the full current Series K dividend has not been declared and set aside.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If the full current-period dividend on the Series K Preferred Stock has not been declared and paid or set aside, Bank of America may not pay dividends on or repurchase common stock or any other junior stock, and may not repurchase parity preferred stock except on a pro rata basis.

Other Preferreds from Bank of America Corp

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 64 (Strong)