Terms

Series

Series PP

Liquidation Preference

$25.00

Coupon Rate

4.125%

Rate Type

Fixed

Annual Dividend

$1.03

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

February 2, 2026

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: Existing And Future Indebtedness Of Bank Of America Corporation, Creditors Of Subsidiaries (Structural Subordination As Holding Company); Pari Passu With: Series B Preferred Stock, Series E Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, Series L Preferred Stock, Series T Preferred Stock, Series U Preferred Stock, Series X Preferred Stock, Series Z Preferred Stock, Series Aa Preferred Stock, Series Cc Preferred Stock, Series Dd Preferred Stock, Series Ee Preferred Stock, Series Ff Preferred Stock, Series Gg Preferred Stock, Series Hh Preferred Stock, Series Jj Preferred Stock, Series Kk Preferred Stock, Series Ll Preferred Stock, Series Mm Preferred Stock, Series Nn Preferred Stock, Series 1 Preferred Stock, Series 2 Preferred Stock, Series 4 Preferred Stock, Series 5 Preferred Stock; Senior To: Common Stock, Any Capital Stock Expressly Junior To Preferred Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.001

Shares Offered

36,600,000

Prospectus Summary

Bank of America Corporation is offering 36,600,000 depositary shares, each representing a 1/1,000th interest in a share of its perpetual 4.125% Non-Cumulative Preferred Stock, Series PP, with a liquidation preference of $25 per depositary share. Dividends are paid at a fixed rate of $1.03125 per depositary share annually ($0.2578125 per quarter) on February 2, May 2, August 2, and November 2, beginning May 2, 2021. Crucially, dividends are non-cumulative: if the board does not declare a dividend for any period, that payment is permanently forfeited — investors have no claim to make-whole payments in the future. Series PP sits senior to Bank of America's common stock and all junior preferred series, and ranks pari passu with more than two dozen existing preferred series. It is junior to all of the holding company's existing and future indebtedness. Because Bank of America Corporation is a holding company, the preferred is structurally subordinated to all creditors of its operating subsidiaries, including Bank of America, N.A. — subsidiary creditors are paid before assets flow up to the holding company. The issue includes a regulatory call: if a change in law causes the preferred to lose Tier 1 capital (Additional Tier 1) treatment under Federal Reserve rules, the company may redeem the entire issue at par within 90 days of that determination. At a $25 liquidation preference, the 4.125% fixed rate implies an effective yield of 4.125% at par. Dividends are expected to qualify as qualified dividend income (QDI) for individual investors (taxed at preferential 15%/20% rates) and may qualify for the dividends-received deduction (DRD) for corporate holders, though the prospectus refers investors to the base prospectus for full tax detail. The record date is the 15th of the calendar month preceding each payment month. The dividend stopper provision blocks any dividend or repurchase of common stock and junior preferred shares if Series PP dividends were not paid in full for the prior period, providing a degree of protection to preferred holders — though given the non-cumulative structure, a missed dividend itself is not recoverable.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Bank of America fails to pay the full dividend on the Series PP Preferred Stock for the immediately preceding dividend period, it is prohibited from paying dividends on or repurchasing its common stock or any other junior stock, and from repurchasing parity preferred stock on other than 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)