19 thoughts on “Bank of America Announces New Preferred Issue”

    1. Good question, on BAC-L. I can only assume it is the $1000 par, which scares people, or the current price way over par, which scares people. Yet with a yield still over 5%, it makes sense to me. (I own a little.) Certainly more attractive than the new 4.25% issue.

    2. Compared to that wfc 1000 par issue bac-l actually has a chance for conversion. I forget the exact value it was but it is not a ridiculous number. 65 bucks a share I think. You get 20 shares. So 1300 in shares if it happens. So if bac goes up 40% they will convert it. How likely is that? Not terribly likely but as bac rises I imagine bac-l would slowly go down to 1300.

      So it trades at 1440 or so. 1440 – 1300 = 140. 60 div per year. 60 / 140 is approx 4.29%. Odd how that matches up with the new preferred nicely. Silly math. If converted you lost the 140. Like I said. Goofy math.

      1. Ignore the goofy math. Wrong div amount. I knew something was odd. Div is 72.50. Was just trying to think outside the box and failed

      2. Fc – “The preferred shares are convertible any time at the holder’s option into 20 common shares of Bank of America Corp” – so it’s not imposed but a choice of the investor.
        My concern has been the “no stated maturity” – Does BAC then have the option to just declare a maturity date?

        1. “On or after 1/30/2013, if the price of the common stock exceeds 130% of the conversion price for 20 of any 30 consecutive trading days, the company may, at their option, force the preferred shares to be converted into common shares at the then prevailing conversion price.”

          It was the very next sentence from quantum where I assume you got your info.

          1. Fc – You got it! Thanks.
            For that reason, the $1,000 par, and the “no stated maturity” – I have zero interest in BAC-L.

  1. There’s been a recent steady decline in MER-K. Is there a fear/announcement this will be called?

    1. Without knowing the amount of pref they plan to sell, a list of all their bonds/preferred/debts, maturity of each, etc.. it is really hard to say. BAC has a lot of moving pieces…

  2. You can guess the news was out before 935 today based on how BAC P traded down.

    I heard 4.5% price talk. Very typical of WS….. now they think rates are increasing, they race to market with new issues

            1. If you prefer–you can set up a RSS feed on edgar for whatever type of form you want notices on.

      1. The coupon will be 4.25% per a TDA Income Section representative, due to strong demand, but I passed as that is too low for me; others may benefit. ( Oct 19 at 12:40 PM )

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