Terms

Series

Series MM

Liquidation Preference

$25.00

Coupon Rate

4.2%

Rate Type

Fixed

Annual Dividend

$1.05

Payment Frequency

Quarterly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

September 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, Non-Equity Claims On The Issuer And Its Assets, Subsidiary Creditors (Structurally); 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

80,000,000

Prospectus Summary

Bank of America Corporation is offering 80,000,000 depositary shares, each representing a 1/400th interest in a share of its perpetual 4.20% Non-Cumulative Preferred Stock, Series MM, with a liquidation preference of $25 per depositary share. The fixed 4.20% coupon translates to $1.05 per depositary share annually ($0.2625 per quarter), payable on March 1, June 1, September 1, and December 1, beginning December 1, 2021. Because the dividends are non-cumulative, if the board chooses not to declare a dividend in any quarter, that amount is permanently forfeited — holders have no right to recover missed payments in future periods. The Series MM Preferred Stock ranks senior to Bank of America's common stock and any junior-designated capital stock, and on parity with its other outstanding preferred series. However, it is subordinate to all of the company's existing and future debt obligations. Critically, because this is a holding company issuance, holders face structural subordination — in a liquidation, creditors of bank subsidiaries are paid first before value flows up to the holding company. A regulatory capital call provision allows redemption of the entire series (not partial) within 90 days if a change in law or regulation causes the stock to lose its qualification as Additional Tier 1 capital under federal banking agency rules — an important risk for investors relying on call date optionality. At the $25 offer price, the effective yield is exactly 4.20% annually. Dividends are expected to qualify as 'qualified dividend income' eligible for the 15%/20% preferential rate for non-corporate U.S. holders (subject to holding period requirements), and for a 50% dividends-received deduction for corporate holders. Record dates are set not more than 30 days before each quarterly payment date. The dividend stopper mechanism means that if a Series MM dividend is skipped for the most recently completed period, Bank of America cannot pay dividends on common stock or repurchase junior/parity capital stock — providing a measure of protection to preferred holders, though missed dividends are not recoverable.

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 MM Preferred Stock for the most recently completed dividend period, it may not pay dividends on common stock or any other junior-ranking capital stock, and may not repurchase junior or parity capital stock, until full Series MM dividends are paid.

Other Preferreds from JPMorgan Chase & Co

Div Score Breakdown

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