Summary
Bank of America Corporation (BAC) filed an 8-K on June 20, 2019, primarily to report the issuance and sale of 1,000,000 Depositary Shares, each representing a 1/25th interest in a share of newly designated Series JJ Preferred Stock. This action involved amending the company's Amended and Restated Certificate of Incorporation through a Certificate of Designations, which defines the specific terms, preferences, and limitations of the Series JJ Preferred Stock. This preferred stock carries a liquidation preference of $25,000 per share. An important aspect for investors is that the terms of the Series JJ Preferred Stock impose restrictions on BAC's ability to pay dividends on its common stock or other junior preferred stock, or to repurchase shares, if it fails to declare and pay full dividends on the Series JJ Preferred Stock. This filing signals a change in the company's capital structure and introduces a new class of preferred equity with specific rights and potential impact on future distributions to common shareholders.
Key Highlights
- 1Bank of America issued 40,000 shares of Series JJ Preferred Stock on June 20, 2019.
- 2The company filed a Certificate of Designations to establish the terms of the Series JJ Preferred Stock, including a liquidation preference of $25,000 per share.
- 31,000,000 Depositary Shares were sold, each representing a 1/25th interest in a share of Series JJ Preferred Stock.
- 4The Series JJ Preferred Stock carries restrictions on common stock and junior preferred stock dividends and repurchases if Series JJ dividends are not paid.
- 5The filing details the process of amending the company's Certificate of Incorporation to include this new preferred stock series.
- 6The offering of Depositary Shares was made under a prospectus supplement dated June 17, 2019.