8-KShareholder MattersCorporate ChangesOther Events+1

BANK OF AMERICA CORP /DE/ 8-K Report, Rights Modification (Sep 1, 2011)

Filed September 1, 2011For 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 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.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report the closing of Bank of America's previously announced $5.0 billion transaction with Berkshire Hathaway Inc., which included the sale of preferred stock and a common stock warrant.

Berkshire Hathaway purchased 50,000 shares of Bank of America's 6% Cumulative Perpetual Preferred Stock, Series T, and a warrant to purchase 700,000,000 shares of Bank of America's common stock for a total of $5.0 billion.

The Series T Preferred Stock has a 6% cumulative dividend rate and a liquidation value of $100,000 per share. Its specific terms were established through a Certificate of Designations filed with the State of Delaware.

No, the terms of both the Series T Preferred Stock and the warrant were more fully described in a previous Form 8-K filed by Bank of America on August 25, 2011. This filing confirms the closing of that transaction.