Summary
Bank of America Corporation (BAC) filed an 8-K report on May 1, 2008, detailing the establishment and offering of its Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series M. This filing indicates a significant capital-raising activity by BAC, aiming to strengthen its financial position during a period of market stress. The Series M Preferred Stock, represented by Depositary Shares, was approved and ratified by a Board Committee on April 25, 2008, with an underwriting agreement finalized on April 24, 2008. This preferred stock carries a liquidation preference of $25,000 per share. Importantly, the issuance of this Series M Preferred Stock imposes certain restrictions on BAC's ability to declare or pay dividends, or repurchase, redeem, or acquire its Junior Stock and Parity Stock, if full dividends on the Series M Preferred Stock are not paid. Investors should note these dividend restrictions and the priority of the Series M Preferred Stock in the capital structure.
Key Highlights
- 1Bank of America established and filed a Certificate of Designations for its Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series M.
- 2The Series M Preferred Stock has a liquidation preference of $25,000 per share.
- 3BAC approved and ratified the public offering of 4,000,000 Depositary Shares, each representing a 1/25th interest in a share of Series M Preferred Stock.
- 4An underwriting agreement was executed on April 24, 2008, with various underwriters for the Depositary Shares.
- 5The issuance of Series M Preferred Stock imposes restrictions on dividends and repurchases of Junior Stock and Parity Stock if preferred dividends are not met.
- 6The filing includes exhibits such as the Underwriting Agreement, Certificate of Designations, Deposit Agreement, and legal opinions.