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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bank of America Corporation | NYSE:BAC | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.08 | -0.21% | 37.83 | 38.31 | 37.78 | 37.92 | 28,668,682 | 01:00:00 |
Filed Pursuant to Rule 424(b)(2)
Registration Statement No. 333-202354 (To Prospectus dated January 20, 2016, Prospectus Supplement dated January 20, 2016 and Product Supplement CBN-1 dated January 22, 2016) |
1,791,840 Units $10 principal amount per unit CUSIP No. 06054B487 |
Pricing Date Settlement Date Maturity Date |
August 25, 2016 September 1, 2016 September 15, 2017 |
|||
Coupon Bearing Notes Linked to the Common Stock of Citigroup Inc.
●
Maturity of approximately one year and one week
●
Interest payable quarterly at the rate of 6.87% per year
●
No participation in any increase in the price of the Underlying Stock, and the Redemption Amount at maturity will not exceed the principal amount per unit
●
1-to-1 downside exposure to decreases in the Underlying Stock beyond a 5.00% decline, with up to 95.00% of your principal at risk
●
All payments on the notes
are
subject to the credit risk of Bank of America Corporation
●
In addition to the underwriting discount set forth below, the notes include a hedging-related charge of $0.075 per un
it. See Structuring the Notes
●
Limited secondary market liquidity, with no exchange listing
|
|||||
Per Unit
|
Total
|
|
Public offering price
(1)
|
$
10.000
|
$
17,918,400
|
Underwriting discount
|
$
0.175
|
$
313,572
|
Proceeds, before expenses, to
BAC
|
$
9.825
|
$
17,604,828
|
(1)
|
Plus accrued interest from the scheduled settlement date, if settlement occurs after that date.
|
Are Not FDIC Insured
|
Are Not Bank Guaranteed
|
May Lose Value
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
Terms of
the
Notes
|
Redemption Amount
Determination
|
|
Issuer:
|
Bank of America Corporation (BAC)
|
In addition to interest payable, on the maturity date, you will receive a cash payment per unit determined as follows:
|
Principal Amount
:
|
$10.00 per unit
|
|
Term:
|
Approximately one year and one week
|
|
Underlying Stock:
|
Common Stock of Citigroup Inc. (the Underlying Company) (NYSE symbol: C)
|
|
Starting Value:
|
46.64 (the Volume Weighted Average Price on the pricing date).
|
|
Volume Weighted Average Price:
|
The volume weighted average price (rounded to two decimal places) shown on page AQR on Bloomberg L.P. for trading in shares of the Underlying Stock taking place from approximately 9:30 a.m. to 4:0
5
p.m. on all U.S. exchanges.
|
|
Ending Value:
|
The Closing Market Price of the Underlying Stock on the valuation
d
ate, multiplied by the Price Multiplier. The valuation
d
ate is subject to postponement in the event of Market Disruption Events, as described beginning on page PS-18 of product supplement CBN-1.
|
|
Threshold Value:
|
44.31
(95.00%
of the Starting Value)
|
|
Valuation Date:
|
September 8, 2017
|
|
Price Multiplier:
|
1, subject to adjustment for certain corporate events relating to the Underlying Stock described beginning on page PS-21 of product supplement CBN-1.
|
|
Interest Rate:
|
6.87% per year
|
|
Interest Payment Dates:
|
December 15, 2016, March 15, 2017, June 15, 2017 and
the maturity date.
|
|
Fees and Charges:
|
The underwriting discount of $0.175 per unit listed on the cover page and the hedging related charge of $0.075 per unit described in Structuring the Notes on page TS-
9
.
|
|
Calculation Agent:
|
Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), a subsidiary of BAC.
|
Coupon Bearing Notes
|
TS
-
2
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
■
|
Product supplement CBN-1 dated
January
22
, 201
6
:
https://www.sec.gov/Archives/edgar/data/70858/000119312516435376/d124017d424b5.htm |
■
|
Series L MTN prospectus supplement dated January 20, 2016 and prospectus dated May 1, 2015:
http://www.sec.gov/Archives/edgar/data/70858/000119312516433708/d122981d424b3.htm |
You may wish to consider an investment in the notes if:
|
The notes may not be an appropriate investment for you if:
|
■
You anticipate that the Ending
Value will
be greater than or equal to the Threshold Value.
■
You seek interest payments on your investment.
■
You accept that the maximum return on the notes is limited to the sum of the quarterly interest
payments,
and that you will not participate in any increases in the price of the Underlying Stock.
■
You
are willing to risk a loss of principal and return
if the Ending Value is below the Threshold Value.
■
You are willing to forgo dividends or other benefits of owning shares of the Underlying Stock.
■
You are willing to accept a limited or no market for sales prior to maturity, and understand that the market prices for the notes, if any, will be affected by various factors, including our actual and perceived creditworthiness, our internal funding rate and fees and charges on the notes.
■
You are willing to assume our credit risk, as issuer of the notes, for all payments under the notes, including the Redemption Amount.
|
■
You
believe
that the Ending Value will be less than the Threshold Value.
■
You anticipate that the price of the Underlying Stock will increase and seek to participate in that increase.
■
You seek 100% principal repayment or preservation of capital.
■
In addition to interest payments, you seek an additional return above the principal amount.
■
You seek to receive dividends or other distributions paid on the Underlying Stock.
■
You seek an investment for which there will be a liquid secondary market.
■
You are unwilling or are unable to take market risk on the notes or to take our credit risk as issuer of the notes.
|
Coupon Bearing Notes
|
TS
-
3
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
1)
|
a Starting Value of 100
.00
;
|
2)
|
a Threshold Value of 95.00 (95.00% of the Starting Value);
|
3)
|
the term of the notes from September 1, 2016 to September 15, 2017; and
|
4)
|
the
interest rate of 6.87% per year.
|
Coupon Bearing Notes
|
TS
-
4
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
Example 1
|
Example 2
|
Example 3
|
|
The Ending Value is greater than or equal to the Starting Value and the Threshold Value
|
The Ending Value is less than the Starting Value but greater than or equal to the Threshold Value
|
The Ending Value is less than the Starting Value and the Threshold Value
|
|
Starting Value
|
100.00
|
100.00
|
100.00
|
Ending Value
|
115.00
|
98.00
|
70.00
|
Threshold Value
|
95.00
|
95.00
|
95.00
|
Interest Rate (per year)
|
6.87%
|
6.87%
|
6.87%
|
Redemption Amount per Unit
|
$10.00
|
$10.00
|
$7.50
|
Total Return of the Underlying Stock
(1)
|
16.45%
|
-0.55%
|
-28.55%
|
Total Return on the Notes
(2)
|
7.14%
|
7.14%
|
-17.86%
|
(1)
|
The total return o
f the Underlying Stock assumes:
|
(a)
|
the percentage change in the price of the Underlying Stock from the Starting Value to the Ending Value;
|
(b)
|
a constant dividend yield of 1.40% per year; and
|
(c)
|
no transaction fees or expenses
.
|
(2)
|
The total return on the notes includes interest paid on the notes from Septemb
er 1, 2016 to September 15, 2017.
|
Coupon Bearing Notes
|
TS
-
5
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
■
|
Depending on the performance of the Underlying Stock as measured shortly before the maturity date, your investment may result in a loss; there is no guaranteed return of principal.
|
■
|
Your return on the notes may be less than the yield you could earn by owning a conventional fixed or floating rate debt security of comparable maturity.
|
■
|
Payments on the notes are subj
ect to our credit risk, and
actual or perceived changes in our creditworthiness are expected to affect the value of the notes. If we become insolvent or are unable to pay our obligations, you may lose your entire investment.
|
■
|
You will not participate in any increase in the price of the Underlying Stock.
|
■
|
Your investment return is limited to the return represented by the periodic interest payments over the term of the notes, and may be less than a comparable investment directly in the Underlying Stock.
|
■
|
The initial estimated value of the notes is an estimate only, determined as of a particular point in time by reference to our and our affiliates’ pricing models. These pricing models consider certain assumptions and variables, including our credit spreads, our
internal funding
rate on the pricing date, mid-market terms on hedging transactions, expectations on interest rates and volatility, price-sensitivity analysis, and the expected term of the notes. These pricing models rely in part on certain forecasts about future events, which may prove to be incorrect.
|
■
|
The public offering price you pay for the notes exceeds the initial estimated value. If you attempt to sell the notes prior to maturity, their market value may be lower than the price you paid for them and lower than the initial estimated value. This is due to, among other things, changes in the
price of the Underlying Stock
,
our internal funding rate
, and the inclusion in the public offering price of the underwriting discount and the hedging related charge, all as further described in Structuring the Notes on page TS-
9
. These factors, together with various credit, market and economic factors over the term of the notes, are expected to reduce the price at which you may be able to sell the notes in any secondary market and will affect the value of the notes in complex and unpredictable ways.
|
■
|
The initial estimated value does not represent a minimum or maximum price at which we, MLPF&S or any of our affiliates would be willing to purchase your notes in any secondary market (if any exists) at any time. The value of your notes at any time after issuance will vary based on many factors that cannot be predicted with accuracy, including the performance of the
Underlying Stock
, our creditworthiness and changes in market conditions.
|
■
|
A trading market is not expected to develop for the notes. Neither we nor MLPF&S is obligated to make a market for, or to repurchase, the notes. There is no assurance that any party will be willing to purchase your notes at any price in any secondary market.
|
■
|
Our business activities as a full service financial institution, including our commercial and investment banking activities, our hedging and trading activities (including trad
ing
in shares of the Underlying Stock) and any hedging and trading activities we engage in for our clients’ accounts, may affect the market value
and return
of the notes and may create conflicts of interest with you.
|
■
|
The Underlying Company will have no obligations relating to the notes, and neither we nor MLPF&S will perform any due diligence procedures with respect to the Underlying Company in connection with this offering.
|
■
|
You will have no rights of a holder of the Underlying Stock, and you will not be entitled to receive shares of the Underlying Stock or dividends or other distributions by the Underlying Company.
|
■
|
While we or our affiliates may from time to time own securities of the Underlying Company, we do not control the Underlying Company, and
have not verified
any disclosure made by
the Underlying Company.
|
■
|
The
payments on the notes
will not be adjusted for all corporate events that could affect t
he Underlying Stock. See Description of the Notes—Anti-Dilution Adjustments beginning on page S-21 of product supplement CBN-1
.
|
■
|
There may be potential conflicts of interest involving the calculation agent, which is an affiliate of ours. We have the right to appoint and remove the calculation agent.
|
■
|
The U.S. federal income tax consequences of the notes are uncertain, and may be adverse to a holder of the notes. See Summary Tax Consequences below and U.S. Federal Income Tax Summary beginning on page PS-29 of product supplement CBN-1.
|
Coupon Bearing Notes
|
TS
-
6
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
High ($)
|
Low ($)
|
|
2008
|
||
First Quarter
|
296.90
|
186.20
|
Second Quarter
|
268.10
|
167.60
|
Third Quarter
|
211.20
|
140.30
|
Fourth Quarter
|
230.00
|
37.70
|
2009
|
||
First Quarter
|
74.60
|
10.20
|
Second Quarter
|
40.20
|
26.80
|
Third Quarter
|
52.30
|
25.90
|
Fourth Quarter
|
50.00
|
32.00
|
2010
|
||
First Quarter
|
43.10
|
31.50
|
Second Quarter
|
49.70
|
36.30
|
Third Quarter
|
43.00
|
36.60
|
Fourth Quarter
|
48.10
|
39.50
|
2011
|
||
First Quarter
|
51.30
|
43.90
|
Second Quarter
|
46.00
|
36.81
|
Third Quarter
|
42.88
|
23.96
|
Fourth Quarter
|
34.17
|
23.11
|
2012
|
||
First Quarter
|
38.08
|
28.17
|
Second Quarter
|
36.87
|
24.82
|
Third Quarter
|
34.79
|
25.24
|
Fourth Quarter
|
40.17
|
32.75
|
2013
|
||
First Quarter
|
47.60
|
41.15
|
Second Quarter
|
53.27
|
42.50
|
Third Quarter
|
53.00
|
47.67
|
Fourth Quarter
|
53.29
|
47.67
|
2014
|
||
First Quarter
|
55.20
|
46.34
|
Second Quarter
|
49.58
|
45.68
|
Third Quarter
|
53.66
|
46.90
|
Fourth Quarter
|
56.37
|
49.68
|
2015
|
||
First Quarter
|
54.26
|
46.95
|
Second Quarter
|
57.39
|
51.52
|
Third Quarter
|
60.34
|
49.00
|
Fourth Quarter
|
55.87
|
49.88
|
2016
|
||
First Quarter
|
51.13
|
34.98
|
Second Quarter
|
47.33
|
38.48
|
Third Quarter (through the pricing date)
|
46.72
|
40.78
|
Coupon Bearing Notes
|
TS
-
7
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
Coupon Bearing Notes
|
TS
-
8
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
Coupon Bearing Notes
|
TS
-
9
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
■
|
There is no
statutory
, judicial, or administrative authority directly addressing the characterization of the notes.
|
■
|
You agree with us (in the
absence
of an administrative determination, or judicial ruling to the contrary) to characterize and treat the notes for all tax purposes as an income-bearing single financial contract linked to the Underlying Stock.
|
■
|
Under this characterization and tax treatment of the notes, we intend to take the position that the stated periodic interest payments constitute tax
able ordinary income to a U.S. H
older (as defined beginning on page 99 of the prospectus) at the time received or accru
ed in accordance with the U.S. H
older’s regular method of accounting. Upon receipt of a cash payment at maturity or upon a sale or exchange of the notes prior to maturity (other than amounts representing accrued stated perio
dic interest payments), a U.S. H
older generally will recognize capital gain or loss. This capital gain or loss generally will be long-term capital gain or loss if you hold the notes for more than one year.
|
■
|
No assurance can be given that the IRS or any court will agree with this characterization and tax treatment.
|
Coupon Bearing Notes
|
TS
-
10
|
Coupon Bearing Notes
Linked to the Common Stock of Citigroup Inc., due September 15, 2017 |
|
Coupon Bearing Notes
|
TS
-
11
|
1 Year Bank of America Chart |
1 Month Bank of America Chart |
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