Bank of America to sell 11% STEP Income notes tied to Citigroup

By Susanna Moon

Chicago, June 11 - Bank of America Corp. plans to price 11% STEP Income Securities due July 2011 based on Citigroup Inc. shares, according to an FWP filing with the Securities and Exchange Commission.

Interest will be payable quarterly.

If Citigroup stock finishes at or above the step level - 111% of the initial share price - the payout at maturity will be par of $10 plus 2% to 6%, with the exact step payment to be set at pricing.

If the stock finishes at or above the threshold level - 90% of the initial level - the payout will be par.

Investors will be exposed to any decline beyond 10%.

The notes will price in June and settle in July.

Merrill Lynch, Pierce, Fenner & Smith Inc. and First Republic Securities Co., LLC are the underwriters.

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