Terms

Series

Series JJ

Liquidation Preference

$25.00

Coupon Rate

4.55%

Rate Type

Fixed

Annual Dividend

$1.14

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

June 1, 2026

First Call Price

$25.00

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Existing And Future Indebtedness Of The Issuer; Pari Passu With: Other Outstanding Series Of Preferred Stock Of The Issuer; Senior To: Common Stock, Any Capital Stock Designated As Junior To The Preferred Stock

Regulatory (Basel III) Call

Yes

Tax Classification

Qualified Dividend

Qualifies for QDI

Yes

Qualifies for DRD

Yes

Depositary Share Fraction

0.0025

Shares Offered

60,000,000

Prospectus Summary

This offering consists of 60,000,000 depositary shares issued by Bank of America Corporation, each representing a 1/400th interest in a share of the perpetual 4.55% Non-Cumulative Preferred Stock, Series JJ, with a liquidation preference of $25 per depositary share. Dividends accrue at 4.55% per annum ($1.1375 annually, or approximately $0.284 per quarter per depositary share), payable on March 1, June 1, September 1, and December 1, beginning June 1, 2021. Critically, the dividends are non-cumulative: if the board does not declare a dividend for any period, that dividend is permanently lost and holders have no right to recover it in future periods. The Series JJ Preferred Stock sits above common stock and any junior-designated capital stock in Bank of America's capital structure, and ranks pari passu with other outstanding preferred series. However, it is subordinate to all of the company's existing and future debt obligations. Because this is a holding company issuance, holders also face structural subordination — in a subsidiary liquidation, the subsidiary's own creditors are paid first before any value flows up to preferred stockholders. A regulatory call provision allows the issuer to redeem the entire issue (not partially) within 90 days if a change in law or regulation causes the Preferred Stock to lose its qualification as Additional Tier 1 capital under federal banking rules, subject to Federal Reserve approval — a meaningful risk that could force early redemption at $25 per depositary share. At the $25 public offering price, the effective yield at par is 4.55%. Dividends are expected to qualify as 'qualified dividend income' eligible for the preferential 15%/20% tax rate for non-corporate U.S. holders meeting applicable holding period requirements, and corporate holders should generally be eligible for a 50% dividends-received deduction. Record dates are set not more than 30 days before each payment date. The dividend stopper mechanism means that if full Series JJ dividends are not paid for the most recently completed period, Bank of America cannot pay dividends on or repurchase common stock or junior capital stock — providing some indirect protection to preferred holders, though the non-cumulative structure means any missed dividend is gone permanently.

Summarized from the SEC prospectus filing.

Distribution History

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If the issuer has not paid full dividends on the Series JJ Preferred Stock for the most recently completed dividend period, it cannot pay dividends on or repurchase its common stock or any other junior-ranking capital stock (subject to limited exceptions such as employee benefit plan repurchases).

Other Preferreds from JPMorgan Chase & Co

Div Score Breakdown

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