8-KOther EventsExhibits & Filings

BANK OF AMERICA CORP /DE/ 8-K Report, Corporate Update (Nov 3, 2004)

Filed November 3, 2004For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

This 8-K filing from Bank of America Corporation (BAC) on November 3, 2004, details a significant capital raising transaction through its trust, BAC Capital Trust V. The company utilized a public offering of Capital Securities to raise substantial funds, which were then reinvested into the Corporation's own debt. Specifically, the Trust offered 20,000,000 Capital Securities at $25 each, totaling $500 million, with an option for underwriters to purchase an additional 3,000,000 securities. This option was partially exercised for 700,000 securities. The proceeds from this offering, along with the sale of Common Securities to Bank of America Corporation itself, were used to purchase 6% Junior Subordinated Notes due 2034 issued by Bank of America. This structure effectively allowed BAC to raise capital through a trust vehicle, reinforcing its balance sheet and providing long-term funding. The entire transaction, including the exercise of the over-allotment option, closed on November 3, 2004, following approvals and agreements dated around October 21, 2004.

Key Highlights

  • 1Bank of America Corporation (BAC) completed a public offering of $500 million in Capital Securities through BAC Capital Trust V.
  • 2The Trust exercised an over-allotment option, purchasing an additional 700,000 Capital Securities.
  • 3Proceeds from the Capital Securities and Common Securities sale were used to purchase $592.8 million in 6% Junior Subordinated Notes due 2034 issued by BAC.
  • 4The transaction was structured using a trust vehicle to facilitate capital raising.
  • 5The offering and related agreements were established in late October 2004 and the transaction closed on November 3, 2004.
  • 6The Capital Securities represent preferred beneficial interests in the assets of the Trust.

Frequently Asked Questions

This 8-K filing primarily announces the details and completion of a capital-raising transaction where Bank of America Corporation, through its trust BAC Capital Trust V, issued Capital Securities to the public and used the proceeds to purchase the Corporation's own Junior Subordinated Notes.

The initial offering of Capital Securities by BAC Capital Trust V was for $500 million. With the partial exercise of the over-allotment option, the total proceeds from the Capital Securities offering amounted to approximately $517.5 million ($500 million + $17.5 million from 700,000 additional securities at $25 each).

The Capital Securities represent preferred beneficial interests in the assets of BAC Capital Trust V. The Trust, in turn, invested the proceeds from selling both the Capital Securities and its Common Securities (sold to Bank of America itself) into 6% Junior Subordinated Notes due 2034 issued by Bank of America Corporation. This is a common structure where a trust issues preferred securities, and the proceeds are lent to the parent company as subordinated debt.

The key agreements and approvals for this transaction were dated around October 21, 2004. The transaction, including the sale of Capital Securities related to the partial exercise of the over-allotment option, officially closed on November 3, 2004.