Bank Of America Prices $2 Billion Of 7.200% Preferred Stock, With Its Own Affiliate Running The Deal
The Series WW preferred carries a 7.200% fixed rate through October 27, 2031, then resets to a Treasury-linked formula.
Bank of America priced $2 billion of a new perpetual preferred stock, Series WW, selling 2,000,000 depositary shares at $1,000 each, according to a prospectus supplement dated Tuesday and filed with the SEC on Thursday. The dividend is 7.200% a year, paid only if the board declares it.
Terms of the Series WW shares
Each depositary share is a 1/25th interest in one share of preferred stock, which carries a $25,000 liquidation preference. That works out to $1,000 per depositary share and a dividend of $72.00 per depositary share each year at the fixed rate.
The 7.200% rate holds until October 27, 2031. After that, it resets to the Five-Year U.S. Treasury Rate plus 2.260%, so the payout could land above or below the opening rate, the prospectus warns. Dividends are non-cumulative: a skipped payment is gone for good and the bank owes nothing later. Payments are quarterly, on January 27, April 27, July 27 and October 27, with the first due January 27, 2027.
The bank may redeem the stock on any dividend date on or after October 27, 2031, at $25,000 per share plus accrued and unpaid dividends. Redemption needs any required Federal Reserve approval, and holders cannot force it.
Proceeds and an in-house underwriter
Underwriting commissions come to $20,000,000, leaving $1,980,000,000 for Bank of America before expenses. The company said it intends to use the net proceeds "for general corporate purposes."
BofA Securities, the bank's own affiliate, is sole book-runner, which the prospectus flags as a conflict of interest under FINRA Rule 5121. A long list of other banks also appears as underwriters. Delivery is expected on or about October 23, 2026, and the shares will not be listed on an exchange.
Bank of America is a bank holding company serving consumers, businesses, institutional investors and governments through four segments: Consumer Banking, Global Wealth & Investment Management, Global Banking and Global Markets. Its market value was $355.1 billion as of Thursday's report.
Risks buyers are told to weigh
Holders rank behind the bank's debt and have no voting or conversion rights. The prospectus says Federal Reserve capital rules, stress-test results and limits on cash flowing up from subsidiaries could restrict dividends.
It also says that if the bank entered resolution, equity holders, preferred included, would absorb losses first. The depositary shares are not insured by the FDIC.
The first test of the dividend comes January 27, 2027, and the fixed rate gives way to the Treasury-based reset on October 27, 2031.
Sources
- Form 424B5 — BANK OF AMERICA CORP /DE/ (BAC) — SEC EDGAR
- https://www.sec.gov/Archives/edgar/data/70858/000191870426031922/form424b2.htm — sec.gov
- https://www.sec.gov/Archives/edgar/data/70858/000191870426032186/form424b2.htm — sec.gov
- https://www.sec.gov/Archives/edgar/data/70858/000191870426032183/form424b2.htm — sec.gov
- October 21, 2026 - 8-K: Current report | Bank of America Corporation (BAC) — investor.bankofamerica.com
