Summary
Bank of America Corporation (BAC) announced on April 30, 2018, that it has initiated the redemption of eleven series of trust preferred securities. This action, along with the concurrent redemption of associated trust common securities held by BAC or its affiliates, is scheduled for June 6, 2018. The company has secured all required regulatory approvals for these redemptions, indicating a smooth process is anticipated. This redemption is expected to result in a significant charge to other income and pretax income, estimated at approximately $800 million. This charge is slated to be recognized in the second quarter of 2018, following the extinguishment of related junior subordinated notes. Investors should note that this is a non-cash accounting event related to a financial restructuring, and the final charge may be subject to adjustments based on precise redemption price calculations. The full details regarding the redemption prices, accrued distributions, and procedural information are available in the attached news release (Exhibit 99.1).
Key Highlights
- 1Bank of America (BAC) is redeeming eleven series of trust preferred securities.
- 2The redemption date for these securities is set for June 6, 2018.
- 3Associated trust common securities held by BAC or its affiliates will also be redeemed.
- 4Necessary regulatory approvals for the redemptions have been obtained.
- 5An estimated pre-tax charge of approximately $800 million will be recorded in Q2 2018.
- 6This charge relates to the extinguishment of junior subordinated notes linked to the trust preferred securities.
- 7A news release with further details on redemption prices and procedures is attached as Exhibit 99.1.