8-KOther EventsExhibits & Filings

BANK OF AMERICA CORP /DE/ 8-K Report, Corporate Update (Aug 2, 2006)

Filed August 2, 2006For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

This 8-K filing by Bank of America Corporation (BAC) on August 2, 2006, reports on the public offering of Capital Securities by BAC Capital Trust XII. The Trust successfully offered 30,000,000 Capital Securities with an aggregate initial offering price of $750 million, bearing a 6.875% interest rate. Furthermore, the underwriters exercised their over-allotment option in full, purchasing an additional 4,500,000 Capital Securities valued at $112.5 million, bringing the total offering to $862.5 million. These Capital Securities represent preferred beneficial interests in the Trust's assets and are backed by Junior Subordinated Notes issued by Bank of America Corporation. The proceeds from the sale of these securities by the Trust will be invested in Bank of America's 6.875% Junior Subordinated Notes due 2055. This transaction effectively provides Bank of America with long-term funding, enhancing its capital structure. The filing also references the associated underwriting agreement, trust documents, and guarantee agreements, all of which are integral to the structure and execution of this financing.

Key Highlights

  • 1Bank of America's BAC Capital Trust XII completed a public offering of $750 million in 6.875% Capital Securities.
  • 2Underwriters fully exercised their over-allotment option, increasing the total offering size to $862.5 million.
  • 3The Capital Securities represent preferred beneficial interests in the Trust.
  • 4Proceeds from the offering will be used by the Trust to purchase Bank of America's 6.875% Junior Subordinated Notes due 2055.
  • 5This transaction is structured to enhance Bank of America's capital base and secure long-term funding.
  • 6The offering was registered under a Form S-3 shelf registration statement filed previously.

Frequently Asked Questions

This 8-K filing announces the successful public offering of Capital Securities by BAC Capital Trust XII, a subsidiary of Bank of America, and the subsequent investment of these proceeds into Bank of America's Junior Subordinated Notes. It effectively details a significant financing transaction for the corporation.

The Capital Securities represent preferred beneficial interests in BAC Capital Trust XII. The Trust, in turn, uses the proceeds from the sale of these securities to purchase Junior Subordinated Notes issued by Bank of America Corporation. This structure allows Bank of America to raise capital while offering investors a specific security vehicle.

The total amount raised from the offering was $862.5 million, consisting of the initial $750 million offering and the additional $112.5 million from the underwriters exercising their over-allotment option. Both the Capital Securities and the underlying Junior Subordinated Notes carry a fixed interest rate of 6.875%.

Junior Subordinated Notes are a type of unsecured debt security that ranks below other senior debt in the event of bankruptcy or liquidation. They are often used by financial institutions to bolster their capital structure, as they can absorb losses and count towards regulatory capital requirements.