Bank of America Announces Redemptions of Floating Rate Senior Notes Due April 2025 and 0.976% Fixed/Floating Rate Senior Notes Due April 2025

Rhea-AI Summary

Bank of America announced the redemption of all outstanding Floating Rate Senior Notes and 0.976% Fixed/Floating Rate Senior Notes due April 2025, totaling $2.85 billion. The redemption price for each series will be 100% of the principal amount plus accrued interest, with payment through The Depository Trust Company. Bank of America is a leading global financial institution with a wide range of banking, investing, and asset management services, serving millions of clients worldwide.

Financial Analyst

The redemption of both Floating Rate Senior Notes and Fixed/Floating Rate Senior Notes by Bank of America ahead of the maturity date indicates a strategic financial decision, possibly reflecting an adjustment in the bank's capital structure or debt management practices. One primary consideration for the early redemption could be the current interest rate environment which might allow the bank to refinance the debt at a lower rate, thus reducing interest expense and potentially improving net interest margin (NIM).

Furthermore, the redemption at 100% of the principal amount, along with accrued interest, suggests that the bank's liquidity position is solid, enabling it to cover this significant payout without strain. This move may be viewed favorably by investors as it can signal both financial strength and a proactive approach to liability management. However, stakeholders should consider the impact on the bank's leverage ratios and whether the capital used for redemption could have been otherwise deployed for growth opportunities or return on equity enhancements.

Debt Market Analyst

Bank of America's decision to redeem these notes can impact the secondary market for similar debt instruments. Given that the redemption is at par value, investors holding these notes will not benefit from a premium, but they will be made whole on their principal investment. This may lead to a neutral or slightly positive reaction in the market, as it removes uncertainty regarding the redemption of these instruments.

However, there could be a downside for investors seeking similar credit and risk profiles, as the redemption removes a set of fixed income products from the market. Consequently, investors may have to look for alternative options, which could affect the demand dynamics for Bank of America's future debt issuances or comparable financial instruments from other issuers.

CHARLOTTE, N.C., April 12, 2024 /PRNewswire/ -- Bank of America Corporation announced today that it will redeem on April 22, 2024 all $600,000,000 principal amount outstanding of its Floating Rate Senior Notes, due April 2025 (CUSIP No. 06051GJU4) (the "Floating Rate Notes"), and all $2,250,000,000 principal amount outstanding of its 0.976% Fixed/Floating Rate Senior Notes, due April 2025 (CUSIP No. 06051GJR1) (the "Fixed/Floating Rate Notes" and, together with the Floating Rate Notes, the "Notes").

The redemption price for each series of the Notes will be equal to 100% of the principal amount of such series, plus accrued and unpaid interest to, but excluding, the redemption date of April 22, 2024. Interest on each series of the Notes will cease to accrue on the redemption date.

Payment of the redemption price for the Notes will be made through the facilities of The Depository Trust Company. The Bank of New York Mellon Trust Company, N.A. is the trustee and paying agent for the Notes.

Bank of America

Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 69 million consumer and small business clients with approximately 3,800 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 57 million verified digital users.  Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services.  The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Forward-looking statements

Certain information contained in this news release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions difficult to predict or beyond our control. You should not place undue reliance on any forward-looking statement and should consider the uncertainties and risks discussed under Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023, and in any of our subsequent Securities and Exchange Commission filings.  Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.

For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom and register for news email alerts.

www.bankofamerica.com

Investors May Contact:

Lee McEntire, Bank of America
Phone: 1.980.388.6780
lee.mcentire@bofa.com

Jonathan G. Blum, Bank of America (Fixed Income)
Phone: 1.212.449.3112
jonathan.blum@bofa.com

Reporters May Contact:

Bill Halldin, Bank of America
Phone: 1.916.724.0093
william.halldin@bofa.com

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SOURCE Bank of America Corporation

What is the total principal amount of the Floating Rate Senior Notes and Fixed/Floating Rate Senior Notes being redeemed by Bank of America?

Bank of America is redeeming all $600,000,000 principal amount outstanding of its Floating Rate Senior Notes and all $2,250,000,000 principal amount outstanding of its 0.976% Fixed/Floating Rate Senior Notes, totaling $2.85 billion.

When will the redemption of the Notes by Bank of America take place?

The redemption of the Notes by Bank of America is scheduled to occur on April 22, 2024.

What is the redemption price for each series of the Notes being redeemed by Bank of America?

The redemption price for each series of the Notes will be equal to 100% of the principal amount of such series, plus accrued and unpaid interest to, but excluding, the redemption date of April 22, 2024.

How will the payment of the redemption price for the Notes be made by Bank of America?

Payment of the redemption price for the Notes will be made through the facilities of The Depository Trust Company.

Who is the trustee and paying agent for the Notes being redeemed by Bank of America?

The Bank of New York Mellon Trust Company, N.A. is the trustee and paying agent for the Notes being redeemed by Bank of America.