8-KOther EventsExhibits & Filings

BANK OF AMERICA CORP /DE/ 8-K Report, Corporate Update (Mar 29, 2006)

Filed March 29, 2006For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

This Form 8-K filing by Bank of America Corporation (BAC) on March 29, 2006, details the successful completion of a public offering of capital securities through its trust subsidiary, BAC Capital Trust X. The offering involved 36,000,000 Capital Securities with a 6.25% interest rate, raising an aggregate initial offering price of $900,000,000. An additional over-allotment option for up to $135,000,000 in Capital Securities was also granted to underwriters. These Capital Securities represent preferred beneficial interests in the Trust's assets. Concurrently, Bank of America Corporation sold its Common Securities to the Trust and invested the proceeds from both the Capital Securities and Common Securities sales into BAC's own 6.25% Junior Subordinated Notes due 2055. This transaction structure is designed to enhance Bank of America's capital base, likely impacting its regulatory capital ratios and financial flexibility.

Key Highlights

  • 1Bank of America successfully completed a public offering of $900 million of 6.25% Capital Securities through BAC Capital Trust X.
  • 2The offering included an over-allotment option of up to $135 million for additional Capital Securities.
  • 3The Capital Securities represent preferred beneficial interests in the Trust's assets.
  • 4Bank of America Corporation sold its Common Securities to BAC Capital Trust X.
  • 5Proceeds from the offering were invested by the Trust into Bank of America's 6.25% Junior Subordinated Notes due 2055.
  • 6The transaction was effective as of March 21, 2006, with the sale closing on March 28, 2006.
  • 7This issuance is part of a larger shelf registration statement filed in May 2005, allowing for various trust preferred securities offerings.

Frequently Asked Questions

This filing reports on the completion of a public offering of capital securities by BAC Capital Trust X, a subsidiary of Bank of America, and the subsequent investment of those proceeds into Bank of America's junior subordinated notes. This is a method for the company to raise capital and strengthen its financial structure.

The Capital Securities are financial instruments issued by BAC Capital Trust X. They represent preferred beneficial interests in the Trust's assets. In essence, investors purchase these securities from the Trust, and the Trust uses the proceeds to buy debt from Bank of America. The Trust also issues 'Common Securities' to Bank of America itself.

Junior Subordinated Notes are a type of long-term debt that ranks below other senior debt in the event of bankruptcy or liquidation. Bank of America issued these notes to the Trust as a way to channel the capital raised from the public offering into the parent company's balance sheet. This structure is common for banks looking to enhance their regulatory capital.

This transaction allows Bank of America to raise a significant amount of capital ($900 million initially, potentially up to $1.035 billion with the over-allotment) which is likely intended to bolster its capital ratios and financial flexibility. The issuance of junior subordinated debt and preferred securities often counts as Tier 1 or Tier 2 capital for regulatory purposes.