Bank of America Announces Redemption of $2,000,000,000 2.456% Fixed/Floating Rate Senior Notes, Due October 2025

Rhea-AI Summary

Bank of America (NYSE: BAC) has announced the redemption of $2 billion in 2.456% Fixed/Floating Rate Senior Notes, due October 2025. The redemption will occur on October 22, 2024, with the redemption price set at 100% of the principal amount plus accrued and unpaid interest. Interest on the Notes will cease to accrue on the redemption date.

The redemption will be processed through The Depository Trust Company, with The Bank of New York Mellon Trust Company, N.A. serving as the trustee and paying agent. This move demonstrates Bank of America's active management of its debt obligations and could potentially impact its financial structure.

Positive

• Proactive management of debt obligations
• Potential reduction in interest expenses

Negative

• None.

Insights

Fixed Income Analyst

Bank of America's decision to redeem $2 billion of its 2.456% Fixed/Floating Rate Senior Notes ahead of their October 2025 maturity represents a calculated liability management move. By exercising this early redemption option at par value (100% of principal plus accrued interest), BAC is likely responding strategically to the current interest rate environment.

The Fixed/Floating Rate structure of these notes typically means they would have shifted from a predetermined fixed rate to a variable rate tied to a benchmark like SOFR plus a spread for their final period. By redeeming these notes approximately one year early, the bank may be avoiding potentially unfavorable floating rate exposure in an uncertain rate environment.

For a financial institution of BAC's scale ($316 billion market cap), this $2 billion redemption—representing less than 1% of the company's market value—constitutes routine balance sheet management rather than a transformative financial action. The bank is likely optimizing its liability structure by eliminating debt that no longer serves its financial objectives efficiently.

The redemption at par value (rather than at a premium) signals this is a standard treasury operation rather than an urgent refinancing need. While potentially beneficial for streamlining the bank's debt maturity profile, this move alone is unlikely to materially impact BAC's overall financial performance or investor outlook.

CHARLOTTE, N.C., Oct. 4, 2024 /PRNewswire/ -- Bank of America Corporation announced today that it will redeem on October 22, 2024, all $2,000,000,000 principal amount outstanding of its 2.456% Fixed/Floating Rate Senior Notes, due October 2025 (CUSIP No. 06051GHW2) (the "Notes"), at a redemption price equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the redemption date of October 22, 2024.  Interest on 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 58 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:

Jocelyn Seidenfeld, Bank of America
Phone: 1.646.743.3356
jocelyn.seidenfeld@bofa.com

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SOURCE Bank of America Corporation

FAQ

What is the total amount of Bank of America (BAC) notes being redeemed on October 22, 2024?

Bank of America (BAC) is redeeming $2 billion in 2.456% Fixed/Floating Rate Senior Notes on October 22, 2024.

What is the redemption price for Bank of America's (BAC) 2.456% Fixed/Floating Rate Senior Notes?

The redemption price is 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the redemption date of October 22, 2024.

When will interest cease to accrue on Bank of America's (BAC) redeemed notes?

Interest on the Notes will cease to accrue on the redemption date, which is October 22, 2024.

Who is the trustee and paying agent for Bank of America's (BAC) 2.456% Fixed/Floating Rate Senior Notes?

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