Summary
This 8-K filing from Bank of America (BAC) details significant unregistered sales of equity securities executed through a series of exchange agreements between November 4 and November 17, 2011. The company exchanged various series of its preferred stock and trust preferred securities for an aggregate of approximately 185.5 million shares of common stock and $998.1 million in senior notes. These exchanges are expected to significantly strengthen Bank of America's capital position. Specifically, the transactions are projected to increase Tier 1 common capital by approximately $1.88 billion and boost the Tier 1 common capital ratio by about 14 basis points under Basel I rules. The exchanges, which involve a substantial amount of preferred and trust preferred securities with an aggregate liquidation preference of $2.7 billion, are being conducted under the Section 3(a)(9) exemption of the Securities Act of 1933, indicating they are with existing security holders without any commission or remuneration paid by the issuer. The settlement of these exchanges was anticipated by November 23, 2011.
Key Highlights
- 1Bank of America executed unregistered sales of equity securities through multiple exchange agreements from November 4-17, 2011.
- 2Approximately 185.5 million shares of common stock were issued in exchange for preferred and trust preferred securities.
- 3Senior notes totaling $998.1 million were also issued as part of these exchanges.
- 4The exchanges involved preferred stock with a liquidation preference of $590.4 million and trust preferred securities valued at $2.1 billion.
- 5These transactions are expected to increase Tier 1 common capital by approximately $1.88 billion.
- 6The Tier 1 common capital ratio is projected to improve by approximately 14 basis points under Basel I.
- 7The exchanges utilized the Section 3(a)(9) exemption of the Securities Act of 1933.