Bank of America Corp (NYSE: BAC) sold 130 million euros, or about $173 million, worth of 2-year fixed-to-floating rate structured notes, according to a report from Bloomberg Businessweek.
The securities, known as “switch notes”, pay a fixed coupon rate of 5.1% for the first three years, after which investors receive payments equivalent to the 10-year euro swap rate. The floating rate bottoms out at 4% and tops out at 8%.
The so-called switch notes allow investors to bet on the direction of interest rates. The 10-year rate declined to 2.27% on August 30th, the lowest price since the Euro launched as a currency in 1999.
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 Commercial Banking, Global Banking & Markets, Global Wealth & Investment Management, with the remaining operations recorded in All Other.
Shares of Bank of America Corp (NYSE: BAC) traded up 3.26% during mid-day trading on Friday.
