Bank of America raised $3 billion in its second trip to the debt market since agreeing to pay almost $16.7 billion in fines for faulty mortgage practices that contributed to the credit crisis.
The second-biggest U.S. lender sold $2 billion of perpetual shares that it can repurchase after 10 years, according to data compiled by Bloomberg. The securities, with face values of $1,000 each, were offered at an initial fixed interest rate of 6.25% until 2024. The rate floats after that. The bank also sold $1 billion of perpetual preferred stock with a face value of $25 and a coupon of 6.625%. Those securities can be called after five years.
Bank of America issued $4.5 billion of notes in three parts last month, after agreeing to pay the harshest penalty yet related to loans that fueled the 2008 financial crisis.
The two-part sale included $3 billion of 4.2% 10-year subordinated notes. Those securities ended at 101.1 cents on the dollar to yield 4.06% on Aug. 29, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Bank of America was one of at least six lenders selling debt in the U.S. market today after the slowest August for bond sales since 2008. Wells Fargo, Lloyds Bank and National Australia Bank were among the others.
The biggest U.S. lender by assets is JPMorgan Chase.