By Angela McDaniels
Tacoma, Wash., May 7 – Bank of America Corp. priced $40 million of 8% floored participation notes due May 10, 2016 linked to the common stock of Apple Inc., according to a 424B2 filing with the Securities and Exchange Commission.
Interest is payable monthly.
The principal amount of each note is $126.70, the closing share price of Apple stock on the pricing date.
If the final share price is greater than the upside participation threshold, 112.3% of the initial share price, the payout at maturity will be par plus 0.65% for every 1% that the final share price exceeds the upside participation threshold.
If the final share price is less than or equal to the upside participation threshold but greater than or equal to the principal return threshold, 109.3% of the initial price, the payout will be par.
Otherwise, the payout will be the downside exchange ratio multiplied by the final share price, subject to a minimum redemption amount of $92.73 per note, or 73.19% of par. The downside exchange ratio is 0.9149, which is equal to the initial share price divided by the principal return threshold.
Investors will receive less than par at maturity if the stock return is less than 9.3%.
The payout can be made in Apple stock or cash at each holder’s option.
BofA Merrill Lynch is the agent.
| Issuer: | Bank of America Corp.
|
| Issue: | Floored participation notes
|
| Underlying stock: | Apple Inc. (Symbol: AAPL)
|
| Amount: | $40,000,475
|
| Maturity: | May 10, 2016
|
| Coupon: | 8%, payable monthly
|
| Price: | Par of $126.70
|
| Payout at maturity: | If final share price is greater than upside participation threshold, par plus 0.65% for every 1% that final share price exceeds upside participation threshold; if final share price is less than or equal to upside participation threshold but greater than or equal to principal return threshold, par; otherwise, 91.49% of final share price, subject to minimum payout of $92.73 per note; payable in Apple stock or cash
|
| Initial price: | $126.70
|
| Upside participation threshold: | $142.28, 112.3% of initial price
|
| Principal return threshold: | $138.48, 109.3% of initial price
|
| Pricing date: | May 5
|
| Settlement date: | May 12
|
| Agent: | BofA Merrill Lynch
|
| Fees: | None
|
| Cusip: | 06053W409
|
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