8-KFinancial EventsShareholder MattersOther Events+1

BANK OF AMERICA CORP /DE/ 8-K Report, Financial Obligation (Oct 1, 2013)

Filed October 1, 2013For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

This 8-K filing by Bank of America Corporation (BAC) on October 1, 2013, details the consummation of the merger between BAC and Merrill Lynch & Co., Inc. (ML&Co.), effective September 30, 2013. A key outcome for investors is BAC's assumption of approximately $61 billion in outstanding long-term debt previously issued by ML&Co. This merger simplifies BAC's corporate structure and integrates ML&Co.'s debt obligations directly onto BAC's balance sheet. Furthermore, the filing outlines BAC's assumption of guarantee obligations for Merrill Lynch's Trust Preferred Securities (TOPrS and ICONs). These securities are backed by ML&Co. debt, which BAC has now assumed. While these securities will remain listed on the NYSE, the assumption of guarantees by BAC constitutes a material modification to the rights of their holders. The company also announced the cessation of separate SEC reporting for ML&Co. post-merger, further consolidating its operations under the Bank of America brand.

Key Highlights

  • 1Bank of America Corporation (BAC) has merged Merrill Lynch & Co., Inc. (ML&Co.) into itself, effective September 30, 2013.
  • 2BAC has assumed approximately $61 billion in outstanding long-term debt issued by ML&Co.
  • 3The merger legally integrates ML&Co.'s debt obligations under BAC.
  • 4BAC has assumed guarantee obligations for ML&Co.'s Trust Preferred Securities (TOPrS and ICONs).
  • 5Assumption of these guarantees is considered a material modification to the rights of Trust Preferred Securities holders.
  • 6ML&Co. will cease to file separate reports with the SEC following the merger.
  • 7The Trust Preferred Securities will continue to be listed on the New York Stock Exchange.

Frequently Asked Questions

The primary financial impact is Bank of America's assumption of approximately $61 billion in outstanding long-term debt previously held by Merrill Lynch & Co., Inc. This consolidates ML&Co.'s debt onto BAC's balance sheet.

Holders of ML&Co.'s long-term debt securities now have BAC as the obligor. BAC has formally assumed all obligations under these securities, meaning BAC is now directly responsible for repayment according to the original terms.

BAC has assumed guarantee obligations for these securities. This is considered a material modification to their rights, as BAC is now directly backing these instruments, which were previously backed by ML&Co. debt that BAC has now also assumed.

No, following the merger, Merrill Lynch & Co., Inc. will cease to separately file reports with the U.S. Securities and Exchange Commission. Its operations and reporting are now integrated into Bank of America Corporation.