Summary
Bank of America Corporation (BAC) announced on November 5, 2012, the completion of a significant debt restructuring event. The company redeemed $862.5 million in capital securities from BAC Capital Trust XII, which also involved the redemption and cancellation of the underlying 6⅞% Junior Subordinated Notes due 2055. This action has triggered a change in the specific debt instrument covered by a Replacement Capital Covenant. As a direct consequence of this redemption, the 6⅞% Junior Subordinated Notes no longer serve as the covered debt under the Replacement Capital Covenant entered into on February 16, 2007. In their place, Bank of America's 6.35% Subordinated InterNotes due December 2037 have been designated as the new covered debt, effective November 5, 2012. This move is important for investors as it alters the specific debt obligations that benefit from the terms of the Replacement Capital Covenant.
Key Highlights
- 1Bank of America (BAC) redeemed $862.5 million in capital securities from BAC Capital Trust XII.
- 2The redemption also involved the cancellation of underlying 6⅞% Junior Subordinated Notes due 2055.
- 3This action triggered a change in the debt covered by a Replacement Capital Covenant.
- 4The 6⅞% Junior Subordinated Notes are no longer the covered debt under the Replacement Capital Covenant.
- 5The 6.35% Subordinated InterNotes due December 2037 are now the covered debt under the Replacement Capital Covenant.
- 6The change in covered debt became effective on November 5, 2012.