Bank of America Corporation Issues New Preferred Stock
By: Tim McPartland,
Financial services giant Bank of America Corporation (NYSE:BAC) has sold a new preferred stock offering that is not investment grade.
As a banking company, the issue is required to be non-cumulative, so if dividends are not declared, they are gone forever. As usual, such shares are perpetual and having no maturity date.
The issue has the normal five-year optional redemption, meaning the company can redeem the shares at their option as early as January 29, 2012. Typically, the issuer will redeem the shares in a “refinancing” transaction on an optional redemption date, if new shares can be issued at a coupon at least ¼- ½% below the coupon on the outstanding shares.
Shares are now trading on the OTC Grey Market under temporary ticker BKRRP
To compare this issue with other Bank of America preferred issues outstanding, you can easily check them on our “swaps” page. The company has seven other issues outstanding.
For those interested in buying on the OTC Grey Market, read a “primer” on the process at this Dividend Yield Hunter link.