Bank of America Corp (NYSE: BAC) announced that it has sold $44 million worth of structured notes which pay more interest when long term rates exceed short term rates.
The 20 year notes were sold on August 10th and pay an interest rate of 14%, according to a prospectus which was filed with the Securities and Exchange Commission. The rate will modify after a year to four times the difference between the 30-year constant-maturity swap rate and the two-year rate benchmarks minus 25%. The two benchmarks measure the cost of exchanging floating and fixed interest rates through the swap market.
The notes, known as steepeners, fell 27% during the second quarter to $330 million, down from $451 million in the first quarter, according to data from Bloomberg. Bank of America Corp (NYSE: BAC)’s steepener offering is the largest since April 16th when Morgan Stanley (NYSE: MS) issued 452 million worth of the securities.
Bank of America Corporation is a bank holding company, and a financial holding company. The Company is a financial institution, serving individual consumers, small and middle market businesses, large corporations and governments with a range of banking, investing, asset management and other financial and risk management products and services. Through its banking subsidiaries (the Banks) and various nonbanking subsidiaries throughout the United States and in selected international markets, it provides a range of banking and nonbanking financial services and products through six business segments: Deposits, Global Card Services, Home Loans & Insurance, Global Banking, Global Markets, Global Wealth & Investment Management (GWIM), with the remaining operations recorded in All Other. On January 1, 2009, the Company completed the acquisition of Merrill Lynch.
Shares of Bank of America Corp (NYSE: BAC) traded up 1.17% hitting $13.22 during mid-day trading on Friday.
