Summary
Bank of America Corporation (BAC) has filed an 8-K report on January 25, 2022, detailing the issuance and sale of new preferred stock. Specifically, the company issued 70,000 shares of its Series RR Preferred Stock, with each share having a liquidation preference of $25,000. These shares were offered to investors through Depositary Shares, with 1,750,000 Depositary Shares sold, each representing a 1/25th interest in a share of the Series RR Preferred Stock. This issuance introduces a new class of preferred stock with a fixed-rate reset and non-cumulative dividend feature. Importantly, the terms of the Series RR Preferred Stock impose restrictions on the company's ability to pay common stock dividends or repurchase shares if it fails to make full dividend payments on the Series RR Preferred Stock. This move is significant for investors as it impacts the capital structure and dividend payout policies of Bank of America.
Key Highlights
- 1Bank of America issued 70,000 shares of Series RR Preferred Stock with a liquidation preference of $25,000 per share.
- 21,750,000 Depositary Shares were sold, each representing a 1/25th interest in a share of Series RR Preferred Stock.
- 3The Series RR Preferred Stock is 4.375% Fixed-Rate Reset Non-Cumulative Preferred Stock.
- 4A Certificate of Designations was filed, defining the terms of the Series RR Preferred Stock.
- 5Dividend payments on common stock and junior/parity preferred stock are restricted if Series RR Preferred Stock dividends are not paid in full.
- 6The filing references a Prospectus dated August 4, 2021, and a Prospectus Supplement dated January 20, 2022, for offering details.
- 7The company has provided various exhibits including underwriting agreements and legal opinions related to the issuance.