Summary
Bank of America Corporation (BAC) filed an 8-K on September 1, 2011, reporting on two significant events. Firstly, the company finalized its previously announced sale of $5.0 billion in cash to Berkshire Hathaway Inc. This transaction involved the issuance of 50,000 shares of 6% Cumulative Perpetual Preferred Stock, Series T, and a warrant to purchase 700,000,000 shares of BAC's common stock. This infusion of capital was a critical development during a period of market uncertainty for the financial sector. Secondly, the filing details the establishment of the terms for the aforementioned Series T Preferred Stock. This formalizes the preferred stock offering and its specific characteristics, including its 6% cumulative dividend rate and $100,000 liquidation value per share. Investors should note that the terms of both the preferred stock and the warrant were previously disclosed in an August 25, 2011 8-K filing, with this report confirming the closing of the transaction.
Key Highlights
- 1Bank of America closed a $5.0 billion transaction with Berkshire Hathaway Inc.
- 2The transaction included the sale of 50,000 shares of 6% Cumulative Perpetual Preferred Stock, Series T.
- 3A warrant to purchase 700,000,000 shares of Bank of America common stock was also issued to Berkshire Hathaway.
- 4The Series T Preferred Stock has a liquidation value of $100,000 per share and a 6% cumulative dividend.
- 5The filing formalizes the establishment of the terms for the Series T Preferred Stock through a Certificate of Designations.
- 6This event represents a significant capital injection for Bank of America.
- 7Details regarding the preferred stock and warrant were previously filed on August 25, 2011, with this report confirming the closing.