Bullish indicating open at $55-$60, IPO prices at $37
Bank of America Corp (NYSE:BAC), a $302.55 billion financial institution and prominent player in the banking sector according to InvestingPro, has announced the issuance of a new series of preferred stock, according to a recent 8-K filing with the Securities and Exchange Commission. On Monday, the financial institution filed a Certificate of Designations, which introduced its 6.625% Fixed-Rate Reset Non-Cumulative Preferred Stock, Series OO, with a par value of $0.01 per share and a liquidation preference of $25,000 per share.
Concurrent with the issuance of the Series OO Preferred Stock, Bank of America also sold 3 million Depositary Shares, each representing a 1/25th interest in a share of Series OO Preferred Stock. These shares were offered under the terms of the Corporation’s Prospectus dated March 28, 2024, and a Prospectus Supplement dated April 24, 2025.
The filing indicates that the rights of security holders have been modified. If the bank fails to declare and pay full dividends on the Series OO Preferred Stock, restrictions will be imposed on its ability to declare or pay dividends, or repurchase or redeem its common stock or any preferred stock that ranks equal or junior to Series OO Preferred Stock. Notably, Bank of America has maintained dividend payments for 55 consecutive years and currently offers a 2.61% dividend yield, with 11 consecutive years of dividend growth - one of many insights available through InvestingPro’s detailed research reports.
The Certificate of Designations was filed with the Secretary of State of the State of Delaware and is incorporated by reference into the 8-K filing. In addition, the filing included an Underwriting Agreement dated April 24, 2025, a Deposit Agreement, the form of Depositary Receipt, and an opinion of McGuireWoods LLP regarding the legality of the Series OO Preferred Stock and the Depositary Shares.
This move by Bank of America may be of interest to investors seeking preferred securities. The information provided here is based on the press release statement filed with the SEC.
In other recent news, a consortium of banks, including Morgan Stanley (NYSE:MS), Bank of America, Barclays (LON:BARC), and Mitsubishi UFJ (NYSE:MUFG), successfully sold the final portion of debt linked to Elon Musk’s $44 billion acquisition of Twitter, now known as X. The banks offloaded loans worth $1.2 billion at 98 cents on the dollar, with a yield of 9.5%, marking the near completion of selling the $13 billion in loans used to finance the purchase. In another development, Bank of America shareholders approved amendments to the company’s Equity Plan, which increases the number of shares available for grant by 100 million and extends the plan’s expiration date to April 21, 2035. Shareholders also approved executive compensation packages, including a $35 million pay package for CEO Brian Moynihan, reflecting a 21% increase due to improved net income and revenue. Furthermore, Phillip Securities upgraded Bank of America’s stock rating from Accumulate to Buy, citing expectations of increased net interest and loan growth for FY25, despite lowering the price target to $45.00. The firm anticipates growth in wealth management fees and higher global markets revenue for the bank. Additionally, Bank of America reported that Emerging Markets Asia, excluding China, experienced significant outflows in the first quarter of 2025, with $33.51 billion withdrawn, primarily impacting equity markets. Despite this, debt markets in the region saw positive inflows, suggesting a shift in investor preference towards bonds.
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