Terms

Series

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

Liquidation Preference

$1,000.00

Coupon Rate

8.125%

Rate Type

Fixed To Floating

Annual Dividend

$81.25

Payment Frequency

Semi Annual

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

May 15, 2018

First Call Price

$1,000.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of Bank Of America Corporation, All Liabilities And Obligations Of Subsidiaries, Any Future Preferred Stock Expressly Senior To Series M; 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 K Preferred Stock, Series L Preferred Stock; Senior To: Common Stock, Any Capital Stock Expressly Junior To The Preferred 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

4,000,000

Prospectus Summary

Bank of America Corporation is offering 4,000,000 depositary shares, each representing a 1/25th interest in a share of its Series M Fixed-to-Floating Rate Non-Cumulative Perpetual Preferred Stock, with a liquidation preference of $1,000 per depositary share ($25,000 per underlying preferred share). From issuance through May 14, 2018, dividends accrue at a fixed 8.125% per annum ($81.25 per depositary share annually), paid semi-annually on May 15 and November 15; thereafter, dividends reset quarterly to three-month LIBOR plus 364 basis points. The preferred stock is non-cumulative, meaning that if the board does not declare a dividend for any period, that dividend is permanently forfeited and holders have no future claim to it. Series M sits above Bank of America's common stock and ranks pari passu with its other outstanding preferred series (B, D, E, F, G, I, J, K, and L), but is junior to all existing and future indebtedness of the holding company. Because Bank of America is a holding company, the preferred effectively bears structural subordination to all creditors of its banking and non-banking subsidiaries. There is no explicit regulatory capital event (Tier 1) redemption trigger in this prospectus; however, any redemption requires prior Federal Reserve Board approval. The terms of outstanding junior subordinated notes also prohibit dividend payments on the preferred if Bank of America is in default or has deferred interest on those notes. At the $1,000 offer price, the initial yield is 8.125% per annum during the fixed-rate period. Dividends may qualify for the preferential 15%/20% qualified dividend income (QDI) rate for individual U.S. holders and the dividends-received deduction (DRD) for corporate holders, provided Bank of America has sufficient current or accumulated earnings and profits — which it represents it currently has, though this is not guaranteed in future years. During the fixed period, payments are made semi-annually on May 15 and November 15; after May 2018, quarterly on February 15, May 15, August 15, and November 15. Record dates are set by the board, not more than 30 days before each payment date. The dividend stopper blocks any distributions on junior stock or repurchases of junior or parity stock in any period for which Series M dividends have not been fully paid or set aside.

Summarized from the SEC prospectus filing.

Distribution History

Floating Rate Terms

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If full dividends on the Series M Preferred Stock for the current dividend period have not been declared and paid or set aside, Bank of America may not pay dividends on or repurchase common stock or other junior stock, and may not repurchase parity preferred stock (except pro rata); additionally, if any senior preferred stock is outstanding and has not received full dividends, no dividends may be paid on Series M.

Other Preferreds from Bank of America Corp

Div Score Breakdown

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