Summary
Bank of America Corporation (BAC) filed an 8-K on January 29, 2008, primarily to report on the issuance and terms of its 7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series L. This filing details the establishment of the Series L Preferred Stock, including its liquidation preference of $1,000 per share, and the associated underwriting agreement with Banc of America Securities LLC for the offering of up to 6.9 million shares, with an additional over-allotment option exercised for 900,000 shares. The issuance of this Series L Preferred Stock introduces certain restrictions on the company's ability to pay dividends or repurchase shares of its "Junior Stock" (common stock and lower-priority stock) and "Parity Stock" if full dividends on the Series L Preferred Stock are not declared and paid. This is a material modification to the rights of other securityholders and a significant point for investors to consider regarding potential future capital allocation decisions.
Key Highlights
- 1Bank of America issued 7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series L.
- 2The Series L Preferred Stock has a liquidation preference of $1,000 per share.
- 3An underwriting agreement was established for the public offering of up to 6.9 million shares, with an additional 900,000 shares purchased under an over-allotment option.
- 4The filing details restrictions on dividends and repurchases of Junior Stock and Parity Stock if Series L Preferred Stock dividends are not met.
- 5This issuance is considered a material modification to the rights of other securityholders.
- 6The issuance was conducted under a Registration Statement on Form S-3, filed on a delayed basis under Rule 415.