[8-K] Bank of America Corporation Reports Material Event

Rhea-AI Filing Summary

Citigroup Global Markets Holdings Inc., guaranteed by Citigroup Inc., is offering Autocallable Contingent Coupon Equity-Linked Securities tied to Marvell Technology, Inc. (MRVL). Each unlisted note has a $1,000 denomination, will be issued on 2 Jul 2025 and will mature on 1 Jul 2027 unless redeemed earlier.

Yield mechanics: On each quarterly valuation date, investors earn a 3.75 % coupon (15 % p.a.) if MRVL’s closing price is at or above the Coupon Barrier of $38.194 (49.5 % of the initial $77.16). Missed coupons may “catch-up” if the barrier is later breached to the upside.

Autocall feature: Beginning 29 Dec 2025 and on five subsequent valuation dates, the notes are automatically called if MRVL closes at or above the initial price. Holders then receive $1,000 + the current coupon + any previously unpaid coupons, truncating further upside.

Downside at maturity: If not called and the Final Underlying Value is < $38.194, principal is converted into 12.96008 MRVL shares (or cash equivalent). A zero share price would wipe out the entire investment; there is no principal protection.

Pricing & fees: Issue price is $1,000; estimated value is $969 (≈3.1 % discount). Underwriting fee up to $18.50 (1.85 %), of which $17.50 is a selling concession and up to $1.00 a structuring fee. Total offering size is $2.863 million.

Risk highlights:

• Exposure to MRVL price on only eight observation dates increases path-dependence and volatility impact.
• Liquidity risk: notes will not be exchange-listed; secondary market is at Citigroup’s discretion.
• Credit risk of both the issuer and guarantor.
• Estimated value below issue price reflects fees, hedging costs and Citi’s internal funding rate.
• U.S. tax treatment uncertain; payments likely treated as ordinary income.

The product is designed for income-oriented investors who can tolerate equity downside, limited upside, early-call uncertainty and issuer credit risk in exchange for a potential 15 % annual coupon.

Positive

• 15 % annual contingent coupon exceeds yields on comparable Citi senior notes, offering enhanced income potential.
• Catch-up mechanism credits previously missed coupons if MRVL later closes above the barrier, partially smoothing income.
• Early-call feature allows full principal return plus coupon as early as December 2025, improving IRR in favourable equity scenarios.
• Barrier set at 49.5 % of initial price provides moderate buffer before equity conversion risk is triggered.

Negative

• No principal protection: final price below $38.194 converts principal into MRVL shares, risking up to 100 % loss.
• Coupon uncertainty: a single sub-barrier close suspends income; investors may earn zero despite high headline rate.
• Liquidity risk: securities are unlisted; resale depends solely on Citi’s discretionary secondary market making.
• Issuer credit exposure: payments rely on Citigroup Global Markets Holdings Inc. and Citigroup Inc. guarantees.
• Embedded fees: estimated value is $969 vs. $1,000 issue price; investors pay ~3 % premium plus 1.85 % underwriting fee.
• Tax ambiguity: prepaid forward treatment not confirmed; ordinary income classification reduces after-tax return.

Insights

Structured Products Analyst

TL;DR: 15 % p.a. coupon attractive, but 49.5 % barrier and equity settlement expose investors to large losses; small $2.9 m deal, neutral for Citi.

Investment profile. The note offers an above-market headline yield with quarterly catch-up, financed by capping upside and embedding a 50 % down-and-in conversion to MRVL shares. With MRVL’s 5-year realised volatility ≈45 %, the 49.5 % barrier is only modestly protective; historical drawdowns show several events <–50 % inside a two-year window.
Autocall dynamics. Early redemption probability is meaningful if MRVL trades sideways-to-up in the first 18 months, translating to IRRs between 7 %-18 % depending on call date. Conversely, a quick sell-off suspends coupons and leaves holders exposed until maturity.
Valuation. Citi prices the note at 96.9 % theoretical value, implying a ~3 % structuring spread plus 1.85 % distribution fees. Investors effectively overpay for the risk relative to replicating via options.
Credit & liquidity. 2-year Citi senior CDS trades ≈65 bps; holders bear that risk in addition to MRVL equity risk. Absence of listing forces buy-and-hold behaviour; bid-offer likely 2-3 points.

Market Risk Analyst

TL;DR: High coupon masks double-barrier risk: miss one observation and income stops; breach final barrier converts to stock, creating equity-level loss.

Risk concentration. Eight observation dates mean gap-risk around earnings is acute; MRVL has historically moved >10 % on results days. A single adverse print below $38.19 eliminates cash-flow and increases volatility-of-vol risk.
Scenario analysis. • Flat / +10 % path → likely autocall in 2026 with ~18 % total return.
• –30 % path → no coupons, no autocall, principal unchanged if final recovers above barrier.
• –55 % path → investor receives ~12.96 shares worth ≤$450, a 55 % capital loss.
Regulatory & tax. 871(m) exemption until 2027 mitigates dividend-equivalent withholding, but ordinary income classification erodes after-tax yield for U.S. buyers.

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As filed with the Securities and Exchange Commission on July 1, 2025

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):

July 1, 2025

BANK OF AMERICA CORPORATION

(Exact name of registrant as specified in its charter)

Delaware

1-6523

56-0906609

(State or Other Jurisdiction of Incorporation)

(Commission File Number)

(IRS Employer Identification No.)

100 North Tryon Street

Charlotte, North Carolina 28255

(Address of principal executive offices)

(704) 386-5681

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol(s)			Name of each exchange on which registered
Common Stock, par value $0.01 per share			BAC			New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of Floating Rate Non-Cumulative Preferred Stock, Series E			BAC PrE			New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 6.000% Non-Cumulative Preferred Stock, Series GG			BAC PrB			New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 5.875% Non-Cumulative Preferred Stock, Series HH			BAC PrK			New York Stock Exchange
7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series L			BAC PrL			New York Stock Exchange
Depositary Shares, each representing a 1/1,200th interest in a share of			BML PrG			New York Stock Exchange
Bank of America Corporation Floating Rate Non-Cumulative
Preferred Stock, Series 1
Depositary Shares, each representing a 1/1,200th interest in a share of			BML PrH			New York Stock Exchange
Bank of America Corporation Floating Rate Non-Cumulative
Preferred Stock, Series 2
Depositary Shares, each representing a 1/1,200th interest in a share of			BML PrJ			New York Stock Exchange
Bank of America Corporation Floating Rate Non-Cumulative
Preferred Stock, Series 4
Depositary Shares, each representing a 1/1,200th interest in a share of			BML PrL			New York Stock Exchange
Bank of America Corporation Floating Rate Non-Cumulative
Preferred Stock, Series 5
Floating Rate Preferred Hybrid Income Term Securities of BAC Capital Trust XIII (and the guarantee related thereto)			BAC/PF			New York Stock Exchange
5.63% Fixed to Floating Rate Preferred Hybrid Income Term Securities of BAC Capital Trust XIV (and the guarantee related thereto)			BAC/PG			New York Stock Exchange
Income Capital Obligation Notes initially due December 15, 2066 of Bank of America Corporation			MER PrK			New York Stock Exchange
Senior Medium-Term Notes, Series A, Step Up Callable Notes, due			BAC/31B			New York Stock Exchange
November 28, 2031 of BofA Finance LLC (and the guarantee of the
Registrant with respect thereto)
Depositary Shares, each representing a 1/1,000th interest in a share of 5.375% Non-Cumulative Preferred Stock, Series KK			BAC PrM			New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 5.000% Non-Cumulative Preferred Stock, Series LL			BAC PrN			New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 4.375% Non-Cumulative Preferred Stock, Series NN			BAC PrO			New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 4.125% Non-Cumulative Preferred Stock, Series PP			BAC PrP			New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 4.250% Non-Cumulative Preferred Stock, Series QQ			BAC PrQ			New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share of 4.750% Non-Cumulative Preferred Stock, Series SS			BAC PrS			New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company			☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01. Other Events.

On July 1, 2025, Bank of America Corporation (the “Corporation”) issued a press release (“Press Release”) announcing that the Corporation plans to increase its quarterly common stock dividend from $0.26 per share to $0.28 per share beginning in the third quarter of 2025. The quarterly common stock dividend is subject to approval by the Corporation’s Board of Directors.

The Press Release also announced the results of the Federal Reserve Board’s 2025 Comprehensive Capital Analysis and Review (“CCAR”). Under current Federal Reserve Board rules, the Corporation’s preliminary stress capital buffer (“SCB”) would improve 70 bps to 2.5%, and its CET1 minimum requirement would be 10.0%, effective October 1, 2025. To the extent the Federal Reserve Board’s recently proposed modifications to the SCB calculation are adopted as proposed, the Corporation’s 2025 stress test results would indicate an SCB of 2.7%, which would make its new CET1 minimum ratio 10.2%, effective January 1, 2026. At March 31, 2025, the Corporation had $201 billion of regulatory CET1 capital and a CET1 ratio of 11.8%, which exceeds the current minimum requirement.

A copy of the Press Release is attached hereto as Exhibit 99.1 and incorporated by reference into this Item 8.01.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are filed herewith:

EXHIBIT NO.						DESCRIPTION OF EXHIBIT
99.1						Bank of America Corporation press release dated July 1, 2025
104						Cover Page Interactive Data File (embedded in the cover page formatted in Inline XBRL)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

						BANK OF AMERICA CORPORATION
						By:			/s/ Ross E. Jeffries, Jr.
									Ross E. Jeffries, Jr.
									Deputy General Counsel and Corporate Secretary

Dated: July 1, 2025

FAQ

What is the coupon rate on Citigroup’s MRVL-linked notes?

The notes pay a 3.75 % quarterly coupon (15 % annualized) only if MRVL’s closing price is at or above $38.194 on each observation date.

When can the Citigroup (C) notes be automatically called?

On six scheduled dates from 29 Dec 2025 to 29 Mar 2027, the notes autocall if MRVL closes at or above the initial $77.16 price.

What happens at maturity if MRVL falls below the 49.5 % barrier?

Investors receive 12.96008 MRVL shares (or cash equivalent) per note, worth the depressed market value, potentially far below $1,000.

How large is the underwriting fee for these Citigroup notes?

Citigroup Global Markets Inc. earns up to $18.50 per $1,000 note (1.85 %), sharing $17.50 with dealers and up to $1 as a structuring fee.

Are the securities listed on any exchange?

No. The notes will not be exchange-listed; liquidity depends on Citigroup making a secondary market, which it may suspend at any time.

What is the estimated value versus the issue price?

Citigroup estimates the fair value at $969, about 3.1 % below the $1,000 issue price, reflecting structuring costs and internal funding rates.