Bank of America to Sell Preferred

Giant banker Bank of America (NYSE:BAC) will be selling a new non-cumulative preferred stock issue. You can count on this issue being pretty huge–30 or 40 million shares.

The shares will be typical for a banking company. Qualified, non-cumulative, with quarterly payments. I expect these to be investment grade.

The guesstimated range of coupon for this issue is 5.375% to 5.50%. The company has announced that they may buy back some equity which we take to mean an outstanding preferred. The company has a 6.625% issue outstanding (BAC-W), which becomes redeemable in September. These shares are trading around $25.44 so there is just a little maybe 15 cents of call risk in the shares.

The preliminary prospectus can be read here.

The permanent ticker will be BAC-M, while the OTC Grey market ticker has not yet been announced.

13 thoughts on “Bank of America to Sell Preferred”

  1. Any thoughts about MER-K? This one is already callable and is the last one of the MERs left.

    1. Too much call risk for my tastes, Vito. Some alternatives for you might be MBINP, INBKZ, CFG.D, C.PRS, or DKT. JPM also has a few good pfd’s – but so much of this stuff is sky high in price.

      1. Thank you alot, Affinity4Investing! I was wondering whether they would call MERpK but I guess it is better for them to go with BACpW even though they would have to wait a few months. Cheers.

  2. More and more things are being called. Even has me starting to worry about the Ameren & CL&P illiquids. AILLL is over 27 now, which is not too bad, but CNTHP & CNLPL are waaaaaaaaaay up there. I keep peeling off a few at a time. Don’t want them all surprise called 6 or 7 dollars lower.

    Folks have pushed up the de facto uncallable BAC-L and
    WFC-L into the 1340s today. I have flipped both several times much lower. I think I’ll just hang on now, along with my other uncallables.

    Don’t want no resets, either. Too many moving parts and I never have been able zero out my Form 1116 carryover taxes. Good luck to all joint filers who exceed the $600 threshold in their taxable accounts.

    JMO

    1. Camroc, if EBBNF can drop $2-$3 more bucks you are going to be posting…”Does anyone know if Form 1116 is difficult to fill out?” šŸ™‚

      1. I’m just glad I sold all those CA reset hummers when I realized they ain’t for moi. But pls let us know if TD withholds on that CU perpetual if it’s in your IRA. That one might tempt me.

        Oh, and that Form 1116 has been easy enough for me to fill out over the years. I just haven’t been able to get it to gimme back anything near all the foreign taxes I’ve paid. lol. On me…

        1. Camroc, that is a very point point… In my situation I will so it isnt a worry, but everyones tax situation is different. I got the Series DD in my taxable. I had one of them in my tax free and it got withheld in TD. I wouldnt advise it since the CU issues are gray market and not Pink sheets. I have not had an issue with Pink sheet issues in tax free. Keep an eye on FTRSF (Fortis). I had it in tax free before flipping and no withholding occurred in TD tax free. It has a lower 2.13% kicker, but it is very safe and it will go lower to compensate for lower kicker. I may get back in it myself if it keeps sagging.

  3. This has to be issued for the redemption of BAC-W in 09/2019. Both are 1 billion $ market values.

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