8-KShareholder MattersCorporate ChangesOther Events+1

BANK OF AMERICA CORP /DE/ 8-K Report, Rights Modification (May 1, 2008)

Filed May 1, 2008For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

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.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the establishment and public offering of Bank of America's new Series M Preferred Stock. This includes details about its features, liquidation preference, and the associated underwriting agreement, as well as the implications for common stockholders regarding dividend payments.

The Series M Preferred Stock is a Fixed-to-Floating Rate Non-Cumulative Preferred Stock with a liquidation preference of $25,000 per share. It is being offered through Depositary Shares, with each Depositary Share representing a 1/25th interest in a share of the preferred stock.

The issuance of Series M Preferred Stock introduces restrictions on Bank of America's ability to declare or pay dividends on, or repurchase its Junior Stock (which includes common stock) and Parity Stock, if the full dividends on the Series M Preferred Stock are not declared and paid. This means common shareholders may see dividend payments or buybacks curtailed if the preferred dividend obligations are not met.

While the 8-K filing confirms the offering of 4,000,000 Depositary Shares, each representing a 1/25th interest in a share of Series M Preferred Stock with a $25,000 liquidation preference per share, it does not explicitly state the total capital raised or the dividend rate in this specific filing. The Prospectus Supplement dated April 24, 2008, would contain these details.