Summary
Bank of America Corporation (BAC) filed an 8-K on January 31, 2022, to report the issuance of 28,000,000 Depositary Shares, each representing a 1/1,000th interest in a share of its new Series SS Preferred Stock. This filing details the terms of the Series SS Preferred Stock, including its 4.750% non-cumulative dividend rate and a liquidation preference of $25,000 per share. The issuance of this preferred stock introduces restrictions on BAC's ability to pay dividends or repurchase common and junior preferred stock if it fails to meet its obligations on the Series SS Preferred Stock. Investors should note that this is a new class of preferred stock designed to enhance capital levels. The non-cumulative nature means missed dividends do not accrue, but the restrictions tied to dividend payments are a key consideration for existing common and preferred shareholders. The company has also filed various exhibits related to the underwriting, deposit agreement, and legal opinions concerning this offering, underscoring the structured nature of this capital-raising event.
Key Highlights
- 1Bank of America issued 28,000,000 Depositary Shares, each representing a 1/1,000th interest in its new Series SS Preferred Stock.
- 2The Series SS Preferred Stock carries a 4.750% non-cumulative dividend rate.
- 3Each share of Series SS Preferred Stock has a liquidation preference of $25,000.
- 4The issuance of Series SS Preferred Stock imposes restrictions on BAC's ability to pay dividends or repurchase common stock and junior preferred stock if Series SS dividends are not paid.
- 5The Certificate of Designations for the Series SS Preferred Stock was filed with the Secretary of State of Delaware, effective January 31, 2022.
- 6The offering of Depositary Shares is governed by a Prospectus dated August 4, 2021, and a Prospectus Supplement dated January 27, 2022.
- 7Key exhibits, including an Underwriting Agreement and a Deposit Agreement, have been filed in connection with this issuance.