8-KShareholder MattersCorporate ChangesOther Events+1

BANK OF AMERICA CORP /DE/ 8-K Report, Rights Modification (Jul 24, 2025)

Filed July 24, 2025For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) has filed an 8-K report detailing the issuance and sale of a new series of preferred stock, specifically the 6.250% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series UU. This filing primarily concerns the establishment of the terms and conditions of this new series, including its par value, liquidation preference, and dividend rate. Importantly, the issuance of this Series UU Preferred Stock introduces restrictions on the company's ability to pay dividends on, or repurchase, its common stock or other parity or junior preferred stock if it fails to meet its dividend obligations on the new Series UU Preferred Stock. This aims to protect the rights of the Series UU Preferred Stock holders by prioritizing their dividend payments. In addition to establishing the Series UU Preferred Stock, Bank of America has also sold 2,500,000 Depositary Shares, each representing a fractional interest in the Series UU Preferred Stock. This transaction, conducted under a prospectus supplement, allows investors to gain exposure to the Series UU Preferred Stock through more accessible units. The filing includes various exhibits such as the underwriting agreement, certificate of designations, deposit agreement, and legal opinions, providing a comprehensive view of the transaction's legal and financial underpinnings.

Key Highlights

  • 1Bank of America (BAC) has issued 100,000 shares of its new 6.250% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series UU.
  • 2The Series UU Preferred Stock has a liquidation preference of $25,000 per share.
  • 3Dividends on the Series UU Preferred Stock are non-cumulative and fixed at 6.250% (subject to reset terms not fully detailed in this 8-K).
  • 4Failure to pay full dividends on the Series UU Preferred Stock will trigger restrictions on BAC's ability to pay common stock dividends or repurchase parity/junior preferred stock.
  • 5BAC has sold 2,500,000 Depositary Shares, each representing a 1/25th interest in a share of the Series UU Preferred Stock.
  • 6The offering of Depositary Shares was conducted under a prospectus supplement dated July 21, 2025.
  • 7Key legal and transactional documents, including the Certificate of Designations and Underwriting Agreement, are included as exhibits.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the establishment and issuance of a new series of preferred stock, the 6.250% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series UU, and the subsequent sale of Depositary Shares representing interests in this preferred stock. It formally outlines the rights and preferences associated with this new class of securities.

The dividend restrictions mean that if Bank of America fails to pay the full dividends on its Series UU Preferred Stock, it will be prohibited from paying dividends on, or repurchasing, its common stock or any preferred stock that ranks equally or junior to the Series UU Preferred Stock. This prioritizes the payment of preferred dividends over common stock distributions or other junior securities.

A Depositary Share is a security that represents a fractional interest in a share of preferred stock. In this case, each Depositary Share represents a 1/25th interest in a share of the Series UU Preferred Stock. This structure often makes the preferred stock more accessible to a broader range of investors by allowing them to purchase smaller units.

The dividend rate is fixed at 6.250%, but the term 'non-cumulative' means that any missed dividend payments are not accumulated and do not need to be paid out in the future. However, the filing does mention that the 'fixed-rate reset' nature of the stock suggests the dividend rate may be subject to adjustments at specific future dates, as detailed in the Certificate of Designations.