Bank of America Tender Offer for Preferred Stock

Bank of America Announces Exchange Offer For Certain Series of Preferred StockCHARLOTTE, N.C., May 28 /
-- - Bank of America Corporation today announced that it is commencing an offer to exchange up to 200 million shares of common stock for outstanding depositary shares of certain series of preferred stock.


The exchange offer is subject to the terms and conditions described in the Offer to Exchange dated May 28, 2009, and the related Letter of Transmittal, which will be filed with the Securities and Exchange Commission.


The exchange offer will expire at midnight, New York City time, on June 24, 2009, unless extended or earlier terminated by Bank of America. Holders of the depositary shares eligible for the exchange will be able to tender their depositary shares, or withdraw their previously tendered depositary shares, any time prior to the expiration of the exchange offer.


The exchange offer would increase Bank of America's Tier 1 common capital by an amount equal to the aggregate liquidation preference of the depositary shares exchanged. The shares issuable in the Exchange Offer are part of Bank of America's previously announced plan to exchange common stock for (non-government) perpetual preferred stock. Bank of America believes that these actions will assist in meeting its $33.9 billion indicated Supervisory Capital Assessment Program (SCAP) buffer set by the Federal Reserve.


Bank of America is offering to issue shares of common stock in the exchange offer in the applicable consideration amount per depositary share specified in the table below. The number of shares of common stock issuable for each exchanged depositary share will be equal to this consideration amount divided by the average of the daily per share volume-weighted average price of Bank of America common stock for each of the five consecutive trading days ending on and including June 22, 2009 (the second business day prior to the scheduled expiration date of the exchange offer). Bank of America will announce this common stock average price no later than 9 a.m., New York City time, on June 23, 2009. One of the conditions of the exchange offer that must be satisfied or waived is that the common stock average price be $10 or greater.

Acceptance CUSIP No. of Series of Preferred Stock NYSE Consideration
Priority Depositary Represented by Ticker for Depositary
Level Shares Depositary Shares Symbol Share


1 060505815 Floating Rate Non-Cumulative BAC PrE $16.25
Preferred Stock, Series E
2 060505583 Floating Rate Non-Cumulative BML PrL $16.25
Preferred Stock, Series 5
3 060505633 Floating Rate Non-Cumulative BML PrG $15.00
Preferred Stock, Series 1
4 060505625 Floating Rate Non-Cumulative BML PrH $15.00
Preferred Stock, Series 2
5 060505617 6.375% Non-Cumulative BML PrI $17.00
Preferred Stock, Series 3
6 060505740 6.625% Non-Cumulative BAC PrI $17.50
Preferred Stock, Series I
7 060505724 7.25% Non-Cumulative BAC PrJ $18.75
Preferred Stock, Series J
8 060505765 8.20% Non-Cumulative BAC PrH $20.50
Preferred Stock, Series H
9 060505559 8.625% Non-Cumulative BML PrQ $21.00
Preferred Stock, Series 8

If the number of shares of common stock issuable in exchange for depositary shares that are validly tendered and not properly withdrawn as of the expiration date exceeds 200 million, Bank of America will accept for exchange that number of depositary shares that does not result in a number of shares of common stock being issued in the exchange offer in excess of 200 million. In that event, acceptance of validly tendered depositary shares will be based on priority levels assigned to each series of preferred stock described below (with priority level 1 being accepted first). Acceptance of the depositary shares also may be subject to proration, as described in the Offer to Exchange.


The exchange offer is subject to a number of conditions which must be satisfied or waived by Bank of America on or prior to the expiration date, as described in the Offer to Exchange.


The terms of the exchange offer and procedures for validly tendering and withdrawing depositary shares are described in detail in the Offer to Exchange and related materials, copies of which may be obtained without charge from the information agent for the exchange offer, D.F. King & Co., Inc., by calling (800) 829-6551 (toll free) or (212) 269-5550 (collect). The Offer to Exchange also will be available free of charge on the SEC's website at www.sec.gov after it is filed as an exhibit to the tender offer schedule.


The exchange offer is being made to holders of depositary shares in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), provided by Section 3(a)(9) of the Securities Act. This press release is not an offer to purchase or an offer to exchange or a solicitation of acceptance of an offer to exchange any securities, and the exchange offer is being made only pursuant to the terms of the Offer to Exchange and the related materials.

Obama's deal for GM Bondholders (WSJ)

JUNE 1, 2009 Majority of GM Bondholders Back Debt-for-Equity Deal
By SHARON TERLEP and KEVIN HELLIKER
DETROIT -- General Motors Corp. moved a step closer to what it hopes will be a smooth bankruptcy process after a majority of investors holding $27 billion in the company's bonds agreed to forgive the debt for equity in the new company.

A battle with the group was one of the biggest hurdles GM faced in orchestrating a quick exit from Chapter 11.

The Obama administration plans to usher GM into bankruptcy court Monday as part of its ambitious effort to remake the American car industry at the tail end of its decades-long decline. President Barack Obama is expected to announce the government's plans for GM in a speech that will try to convey the message that the government can rebuild GM and Chrysler LLC and salvage some of the taxpayers' investments.

The auto maker, living on U.S. government loans, faces a Monday deadline imposed by the Obama administration. GM announced Friday that Chief Executive Fritz Henderson would give a press conference on Monday in New York outlining proceedings that would likely take place.

Initially, the company said getting bondholders to agree to a debt swap was its best chance for avoiding Chapter 11. But the latest plan is designed to expedite a bankruptcy filling more than to avoid it. As part of the agreement, bondholders pledged not to oppose GM's reorganization in court.


Under the plan, the Treasury would provide GM with $30 billion in loans to keep running through a bankruptcy, in addition to $20 billion already given to the company. GM won't have to repay the loans; instead, the government will turn them into a controlling stake in the company. The United Auto Workers union would end up with at least a 17.5% stake in the new company after agreeing to concessions that will save GM about $10 billion in obligations to retiree health care as well as billions more on labor costs. In exchange, GM agreed to use a soon-to-be-determined idled plant to build a small car in the U.S.

GM and the Obama administration, encouraged by Chrysler's progress in bankruptcy court over the past month, hope the company could emerge in as little as 30 days. GM, however, could still face challenges from hundreds of dealers its trying to shut down. The company also is still negotiating with Delphi Corp., its bankrupt former parts arm.

It could be six to 18 months before GM becomes a publicly traded company again, administration officials said.

Under its restructuring plan, GM will shed billions in debt, gain billions in work-force savings, will close more than a dozen factories and reduce its network of dealers.

Amid those savings, the most crucial question facing GM -- and every other player in the global automotive industry -- is when demand will return, and with what force. Since January, new-vehicle sales in the U.S. have dropped nearly 40% to an annual rate of fewer than 9.5 million units a year. At that level, even Toyota Motor Corp. is losing money.


Although General Motors is most likely headed for bankruptcy, the car maker used to be king of the road and part of the fabric of American life.
Under the restructuring plan, the new GM would break even when the rate of new-vehicle sales in America reached 10 million a year -- by industry standards a highly competitive benchmark. In the view of analysts, economic recovery will unleash pent-up demand, pushing U.S. sales far past GM's break-even point, if not within reach of the historic peak of more than 17 million new-vehicle sales back in 2000.

But a new GM won't prosper without halting a decades-long slide in U.S. market share, to 22% in 2008 from 45% in 1980. In doing so, it faces a legacy of inconsistent quality that turned large swaths of the American market toward more-reliable foreign models.

Although GM in recent years has made tremendous gains in quality and design, a big question is whether it can maintain that progress following the retirement this year of Robert Lutz as vice chairman of global product development. Legendary for his role in developing such hot models as Chrysler's Dodge Viper and the Ford Explorer, Mr. Lutz came to GM in 2001 and launched a product turnaround that garnered two North American Car of the Year Awards and propelled Buick to the top of the J.D. Power & Associates long-term quality rankings.

GM's most anticipated car-in-the-works -- the electric-powered Chevrolet Volt -- is the brainchild of Mr. Lutz. "Can we keep it going -- that's the million-dollar question," says Jack Keebler, a former Motor Trend editor whom Mr. Lutz hired to review cars during the development process.

Mr. Keebler believes the progress will continue, saying GM has passed "the tipping point."

Bondholders had until Saturday evening to voice support for a new offer that would give them a 10% share of the restructured company and warrants for another 15%.

An ad hoc committee representing major bondholders agreed to support the offer and encouraged other big investors to back the deal. A group of dissident bondholders represented by Thomas Lauria, also a lawyer for holdouts in the Chrysler case, fought against the deal. He argued that small, individual bondholders were left with no voice as the Treasury negotiated directly with GM's large institutional holders.

It was up to Treasury, which brokered the deal, to determine whether enough bondholders agreed for the offer to stand. A spokesman for the bondholder committee said approximately 54% of the bonds have indicated their support and that 975 institutions either sent support letters or gave indications of support.

The government sweetened the offer last week after bondholders overwhelmingly rejected an earlier proposal that would have left them with 10% equity in the new GM.

Analysts' estimates have bondholders coming out of the new deal with around 10 cents on the dollar, compared to as little as nothing under the old offer.

Write to Sharon Terlep at sharon.terlep@dowjones.com and Kevin Helliker at kevin.helliker@wsj.com

Printed in The Wall Street Journal, page A1