8-KShareholder MattersCorporate ChangesOther Events+1

BANK OF AMERICA CORP /DE/ 8-K Report, Rights Modification (Mar 15, 2018)

Filed March 15, 2018For 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 March 15, 2018, to report on the issuance and sale of its Series FF Preferred Stock. Specifically, the company issued 94,000 shares of Series FF Preferred Stock, which are represented by 2,350,000 Depositary Shares. Each Depositary Share represents a 1/25th interest in a share of the Series FF Preferred Stock, with a liquidation preference of $25,000 per share. This filing is significant as it outlines the terms and conditions associated with this new preferred stock issuance. A key takeaway for investors is the introduction of restrictions on the company's ability to pay dividends or repurchase common or junior preferred stock if full dividends on the Series FF Preferred Stock are not met. This structure aims to provide a priority claim for Series FF Preferred Stock holders regarding dividend payments.

Key Highlights

  • 1Bank of America issued 94,000 shares of Series FF Preferred Stock, each with a $25,000 liquidation preference.
  • 2The issuance was conducted through 2,350,000 Depositary Shares, each representing a 1/25th interest in a share of Series FF Preferred Stock.
  • 3A Certificate of Designations was filed to establish the terms, preferences, and rights of the Series FF Preferred Stock.
  • 4The Series FF Preferred Stock has fixed-to-floating rate, non-cumulative dividend features.
  • 5Restrictions are imposed on BAC's ability to pay dividends or repurchase common/junior preferred stock if Series FF Preferred Stock dividends are not fully paid.
  • 6The sale of Depositary Shares was based on a prospectus dated May 1, 2015, supplemented by a prospectus supplement dated March 8, 2018.
  • 7The filing includes various exhibits detailing the underwriting agreement, certificate of designations, deposit agreement, and legal opinions.

Frequently Asked Questions

The Series FF Preferred Stock is a new class of preferred stock issued by Bank of America Corporation. It is a Fixed-to-Floating Rate Non-Cumulative Preferred Stock with a liquidation preference of $25,000 per share.

The issuance introduces restrictions. If Bank of America fails to declare and pay full dividends on the Series FF Preferred Stock, the company's ability to declare or pay dividends on, or repurchase, common stock or any junior preferred stock will be restricted. This prioritizes dividend payments to Series FF Preferred Stock holders.

The Depositary Shares are the instruments through which the Series FF Preferred Stock was offered and sold to the public. Each Depositary Share represents a fraction (1/25th) of a share of the Series FF Preferred Stock, making it more accessible for a broader range of investors.

The Certificate of Designations for the Series FF Preferred Stock was filed on March 15, 2018. The sale of the corresponding Depositary Shares also closed on March 15, 2018.