Enhanced Participation. Enhanced Participation Structured Investments may offer investors the potential to receive better than market returns on the performance of the underlying asset. Some structures may offer leverage in exchange for a capped or limited upside potential and also in exchange for downside risk. These investments are not structured to include the principal protection feature. The classification of Structured Investments is meant solely for informational purposes and is not intended to fully describe any particular Structured Investment nor guarantee any particular performance. Table of Contents Product Supplement No. STR-1 (To Prospectus dated May 5, 2006 and Series L Prospectus Supplement dated April 10, 2008) January 2, 2009 Strategic Accelerated Redemption Securities® • Strategic Accelerated Redemption Securities® (the “notes”) are unsecured senior notes issued by Bank of America Corporation. The notes are not principal protected, and we will not pay interest on the notes. • This product supplement describes the general terms of the notes and the general manner in which they may be offered and sold. For each offering of the notes, we will provide you with a pricing supplement (which we may refer to as a “term sheet”) that will describe the specific terms of that offering. The term sheet will identify any additions or changes to the terms specified in this product supplement. • The term sheet will also identify the underlying “Market Measure,” which may be one or more equity-based or commodity-based indices, one or more exchange traded funds, one or more equity securities, commodities, or other assets, any other statistical measure of economic or financial performance, including, but not limited to, any currency, currency index, consumer price index or mortgage index, interest rate, or any combination of the foregoing. We also may describe the Market Measure in an additional supplement to the prospectus, which we refer to as an “index supplement.” • The notes will be automatically called if the Observation Level (as defined below) of the applicable Market Measure on any Observation Date (as defined below) is greater than or equal to the applicable Call Level (as defined below) for that Observation Date, all as set forth in the applicable term sheet. If the notes are called, you will receive a cash payment for each unit of notes (the “Call Amount”) that will be set forth in the applicable term sheet. If specified in the applicable term sheet, your notes may be “bear notes,” which will be called if the Observation Level of the applicable Market Measure on any Observation Date is less than or equal to the applicable Call Level for that Observation Date. Except where otherwise specifically provided in this product supplement, all references in this product supplement to “notes” shall be deemed to include a reference to bear notes. • At maturity, if the notes have not been called, for each unit of notes you own, you will receive a cash payment (the “Redemption Amount”) based on the direction of and percentage change in the value of the applicable Market Measure from the Starting Value to the Ending Value (each as defined below), calculated as described in this product supplement. • If the Ending Value is greater than or equal to (or, in the case of bear notes, less than or equal to) the “Threshold Value” specified in the applicable term sheet, you will receive the Original Offering Price (as defined below) per unit. We will determine the Threshold Value on the pricing date of the notes, which will be the date the notes are priced for initial sale to the public. • If the Ending Value is less than (or, in the case of bear notes, greater than) the Threshold Value, you will lose a percentage of the principal amount of your notes based on the percentage decline (or, in the case of bear notes, percentage increase) in the value of the Market Measure in excess of the Threshold Value, from the Starting Value to the Ending Value, multiplied by a “Leverage Factor” specified in the applicable term sheet. The applicable Leverage Factor may be 100%. • The notes will be issued in denominations of whole units. Each unit will have a public offering price as set forth in the applicable term sheet (the “Original Offering Price”). The term sheet may also set forth a minimum number of units that you must purchase. • If provided for in the applicable term sheet, we may apply to have your notes listed on a securities exchange or quotation system. If approval of such an application is granted, your notes will be listed on the securities exchange or quotation system at the time of such approval. We make no representations, however, that your notes will be listed or, if listed, will remain listed for the entire term of your notes. • One or more of our affiliates, including Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated (“MLPF&S”), may act as our selling agents to offer the notes. The notes are unsecured and are not savings accounts, deposits, or other obligations of a bank. The notes are not guaranteed by Bank of America, N.A. or any other bank, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency and involve investment risks. Potential purchasers of the notes should consider the information in “Risk Factors ” beginning on page S-10. You may lose some or all of your investment in the notes. None of the Securities and Exchange Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these notes or passed upon the adequacy or accuracy of this product supplement, the prospectus supplement, or the prospectus. Any representation to the contrary is a criminal offense. Xxxxxxx Xxxxx & Co. Table of Contents TABLE OF CONTENTS Page SUMMARY S-3 RISK FACTORS S-10 USE OF PROCEEDS S-23 SUPPLEMENTAL PLAN OF DISTRIBUTION S-41 U.S. FEDERAL INCOME TAX SUMMARY S-41 ERISA CONSIDERATIONS S-48 Strategic Accelerated Redemption Securities® is a registered service mark of our subsidiary, Xxxxxxx Xxxxx & Co., Inc. Table of Contents SUMMARY This product supplement relates only to the notes and does not relate to any underlying asset that comprises the Market Measure described in any term sheet. This summary includes questions and answers that highlight selected information from the prospectus, prospectus supplement, and this product supplement to help you understand the notes. You should read carefully the entire prospectus, prospectus supplement, and product supplement, together with the applicable term sheet and any applicable index supplement, to understand fully the terms of your notes, as well as the tax and other considerations important to you in making a decision about whether to invest in any notes. In particular, you should review carefully the section in this product supplement entitled “Risk Factors,” which highlights a number of risks of an investment in the notes, to determine whether an investment in the notes is appropriate for you. If information in this product supplement is inconsistent with the prospectus or prospectus supplement, this product supplement will supersede those documents. However, if information in any term sheet or index supplement is inconsistent with this product supplement, that term sheet or index supplement will supersede this product supplement. Certain capitalized terms used and not defined in this product supplement have the meanings ascribed to them in the prospectus supplement and prospectus. In light of the complexity of the transactions described in this product supplement, you are urged to consult with your own attorneys and business and tax advisors before making a decision to purchase any notes. The information in this “Summary” section is qualified in its entirety by the more detailed explanation set forth elsewhere in this product supplement, the prospectus supplement, and prospectus, as well as the applicable term sheet and any index supplement. You should rely only on the information contained in those documents. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Neither we nor any selling agent is making an offer to sell the notes in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this product supplement, the prospectus supplement, and prospectus, together with the term sheet and any index supplement, is accurate only as of the date on their respective front covers. What are the notes? The notes are senior debt securities issued by Bank of America Corporation, and are not secured by collateral. The notes will rank equally with all of our other unsecured senior indebtedness from time to time outstanding, and any payments due on the notes, including any repayment of principal, will be subject to our credit risk. Each series of notes will mature on the date set forth in the applicable term sheet, unless we call the notes on an earlier date, as described in this product supplement and in the applicable term sheet. The notes are not principal protected. The notes are designed for investors who seek an early exit prior to maturity at a premium if the value of the applicable Market Measure (such as the level of an index or the price of a share of an exchange traded fund) is at or above (or, in the case of bear notes, at or below) its applicable Call Level on the relevant Observation Date. You should be willing to lose some or all of your principal if the notes are not called prior to their maturity, and the applicable Market Measure has declined below (or, in the case of bear notes, has increased above) the Threshold Value on the final Observation Date shortly before the maturity date. The notes may or may not pay periodic interest. Unless specified in the applicable term sheet, your notes will not pay interest. You must be willing to forgo interest payments on your investment (such as fixed or floating interest rates paid on conventional non-callable debt securities) if the Table of Contents notes are non-interest bearing, accept a return that will not exceed the Call Amount, and bear the risk of loss of all or substantially all of your investment. You should also be aware that the automatic call feature may shorten the term of an investment in the notes, and be willing to accept that your notes may be called on any Observation Date. The Call Level, Observation Dates, Threshold Value, and Call Amount will be set forth in the applicable term sheet. Are the notes equity or debt securities? The notes are our senior debt securities. However, the notes will differ from traditional debt securities in that their return is linked to the performance of the underlying Market Measure, they will not be principal protected, and unless otherwise specified in the applicable term sheet, you will not receive interest payments. If the notes are called prior to the maturity date, the total cash amount that you will receive as payment on the notes will equal the Call Amount specified in the applicable term sheet. If the notes are not called prior to the maturity date, you may receive an amount that is less than the Original Offering Price, depending upon the performance of the Market Measure over the term of the notes. We describe below how this amount at maturity is determined. Will you receive interest on the notes? Unless otherwise specified in the applicable term sheet, you will not receive any interest payments on the notes. If the applicable term sheet provides for the payment of interest on the notes, the applicable term sheet will indicate the relevant terms on which you will receive interest payments. See “Description of the Notes—Interest.” Is it possible for you to lose some or all of your investment in the notes?
Appears in 6 contracts
Samples: Bank of America Corp /De/, Bank of America Corp /De/, Bank of America Corp /De/
Enhanced Participation. Enhanced Participation Structured Investments may offer investors the potential to receive better than market returns on the performance of the underlying asset. Some structures may offer leverage in exchange for a capped or limited upside potential and also in exchange for downside risk. These investments are not structured to include the principal protection feature. The classification of Structured Investments is meant solely for informational purposes and is not intended to fully describe any particular Structured Investment nor guarantee any particular performance. Table of Contents Product Supplement No. STR-1 MITTS-1 (To Prospectus dated May 5, 2006 and Series L Prospectus Supplement dated April 10, 2008) January 228, 2009 Strategic Accelerated Redemption Market Index Target-Term Securities® “MITTS®” • Strategic Accelerated Redemption Securities® (the “notes”) MITTS are unsecured senior notes issued by Bank of America Corporation. The notes MITTS will have some level of principal protection on the maturity date, as specified in the applicable term sheet. Unless indicated in the applicable term sheet, MITTS will be 100% principal protected at maturity. If MITTS are not less than 100% principal protected, and we investors must be willing to lose up to the percentage of their investment indicated in the applicable term sheet (as defined below). We will not pay interest on the notesMITTS. • This product supplement describes the general terms of the notes MITTS and the general manner in which they may be offered and sold. For each offering of the notesMITTS, we will provide you with a pricing supplement (which we may refer to as a “term sheet”) that will describe the specific terms of that offering. The term sheet will identify any additions or changes to the terms specified in this product supplement. • The term sheet will also identify the underlying “Market Measure,” which may be one or more equity-based or commodity-based indices, one or more exchange traded funds, one or more equity securities, commodities, or other assets, any other statistical measure of economic or financial performance, including, but not limited to, any currencycurrency exchange rate, currency index, consumer price index index, or mortgage index, interest rate, or any combination of the foregoing. We also may describe the Market Measure in an additional supplement to the prospectus, which we refer to as an “index supplement.” • The notes will be automatically called if the Observation Level (as defined below) of the applicable Market Measure on any Observation Date (as defined below) is greater than or equal to the applicable Call Level (as defined below) for that Observation Date, all as set forth in the applicable term sheet. If the notes are calledAt maturity, you will receive a cash payment for each per unit of notes (the “Call Redemption Amount”) based upon the direction of and percentage change in the value of the applicable Market Measure from the Starting Value (as defined below) to the Ending Value (as defined below), calculated as described in this product supplement. In no case will you receive a Redemption Amount that will is less than a minimum redemption amount per unit (the “Minimum Redemption Amount”). The Minimum Redemption Amount may be set forth less than, equal to, or greater than, the Original Offering Price (as defined below), as specified in the applicable term sheet. • If specified in the applicable term sheet, your notes MITTS may be “bear notesBear MITTS,” which will be called may pay a Redemption Amount in excess of their Original Offering Price if the Observation Level value of the applicable Market Measure on any Observation Date is decreases, and which may pay a Redemption Amount less than their Original Offering Price if the value of the Market Measure increases. We will not offer Bear MITTS in which the underlying Market Measure consists of one or equal to the applicable Call Level for that Observation Datemore currency exchange rates. Except where otherwise specifically provided in this product supplement, all references in this product supplement to “notesMITTS” shall be deemed to include a reference to bear notesBear MITTS. • At maturityIn the case of MITTS, if unless the notes have not been calledapplicable term sheet provides otherwise: • If the Ending Value is greater than the Starting Value, for each unit of notes you own, then you will receive at maturity a cash payment Redemption Amount per unit equal to the greater of (a) the “Minimum Redemption Amount”Amount and (b) based on the direction sum of (i) the Base Value (as defined below) per unit and (ii) the Original Offering Price multiplied by the percentage change in the value increase of the applicable Market Measure from the Starting Value to the Ending Value Value, multiplied by a Participation Rate (each as defined below). If specified in the applicable term sheet, calculated as described the Redemption Amount will not exceed a specified cap (the “Capped Value”). • If the Ending Value is less than or equal to the Starting Value, then you will receive at maturity a Redemption Amount per unit equal to the greater of (a) the Minimum Redemption Amount and (b)(i) the Base Value per unit minus (ii) the Original Offering Price multiplied by the percentage decrease of the Market Measure. • In the case of Bear MITTS, unless the applicable term sheet provides otherwise: • If the Ending Value is less than the Starting Value, then you will receive at maturity a Redemption Amount per unit equal to the greater of (a) the Minimum Redemption Amount and (b) the sum of (i) the Base Value per unit and (ii) the Original Offering Price multiplied by the percentage decrease of the Market Measure from the Starting Value to the Ending Value, multiplied by a Participation Rate. If specified in this product supplementthe applicable term sheet, the Redemption Amount will not exceed a Capped Value. • If the Ending Value is greater than or equal to (orthe Starting Value, in the case of bear notes, less than or equal to) the “Threshold Value” specified in the applicable term sheet, then you will receive at maturity a Redemption Amount per unit equal to the greater of (a) the Minimum Redemption Amount and (b)(i) the Base Value per unit minus (ii) the Original Offering Price (as defined below) per unit. We will determine the Threshold Value on the pricing date of the notes, which will be the date the notes are priced for initial sale to the public. • If the Ending Value is less than (or, in the case of bear notes, greater than) the Threshold Value, you will lose a percentage of the principal amount of your notes based on multiplied by the percentage decline (or, in the case of bear notes, percentage increase) in the value increase of the Market Measure in excess of the Threshold Value, from the Starting Value to the Ending Value, multiplied by a “Leverage Factor” specified in the applicable term sheet. The applicable Leverage Factor may be 100%. • The notes Base Value will be a dollar value per unit, and may be less than, equal to, or greater than the Original Offering Price. • MITTS will be issued in denominations of whole units. Each unit will have a public offering price as set forth in the applicable term sheet (the “Original Offering Price”). The term sheet may also set forth a minimum number of units that you must purchase. • If provided for in the applicable term sheet, we may apply to have your notes MITTS listed on a securities exchange or quotation system. If approval of such an application is granted, your notes MITTS will be listed on the securities exchange or quotation system at the time of such approval. We make no representations, however, that your notes MITTS will be listed or, if listed, will remain listed for the entire term of your notesMITTS. • One or more of our affiliates, including Xxxxxxx Lynch, XxxxxxPierce, Xxxxxx & Xxxxx Incorporated (“MLPF&S”), and Banc of America Investment Services, Inc. (“BAI”), may act as our selling agents to offer the notesMITTS. The notes MITTS are unsecured and are not savings accounts, deposits, or other obligations of a bank. The notes MITTS are not guaranteed by Bank of America, N.A. or any other bank, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency and involve investment risks. Potential purchasers of the notes MITTS should consider the information in “Risk Factors Factors” beginning on page S-10S-11. You may lose some or all of your investment in the notesMITTS. None of the Securities and Exchange Commission (the “SEC”), any state securities commission, or any other regulatory body has approved or disapproved of these notes securities or passed upon the adequacy or accuracy of this product supplement, the prospectus supplement, or the prospectus. Any representation to the contrary is a criminal offense. Xxxxxxx Xxxxx & Co. Banc of America Investment Services, Inc. Table of Contents TABLE OF CONTENTS Page SUMMARY S-3 RISK FACTORS S-10 S-11 USE OF PROCEEDS S-23 S-24 DESCRIPTION OF MITTS S-25 SUPPLEMENTAL PLAN OF DISTRIBUTION S-41 S-38 U.S. FEDERAL INCOME TAX SUMMARY S-41 S-38 ERISA CONSIDERATIONS S-48 Strategic Accelerated Redemption S-46 Market Index Target-Term Securities® is a and MITTS® are each registered service mark marks of our subsidiary, Xxxxxxx Xxxxx & Co., Inc. Table of Contents SUMMARY This product supplement relates only to the notes MITTS and does not relate to any underlying asset that comprises the Market Measure described in any term sheet. This summary includes questions and answers that highlight selected information from the prospectus, prospectus supplement, and this product supplement to help you understand the notesMITTS. You should read carefully the entire prospectus, prospectus supplement, and product supplement, together with the applicable term sheet and any applicable index supplement, to understand fully the terms of your notesMITTS, as well as the tax and other considerations important to you in making a decision about whether to invest in any notesMITTS. In particular, you should review carefully the section in this product supplement entitled “Risk Factors,” which highlights a number of risks of an investment in the notesMITTS, to determine whether an investment in the notes MITTS is appropriate for you. If information in this product supplement is inconsistent with the prospectus or prospectus supplement, this product supplement will supersede those documents. However, if information in any term sheet or index supplement is inconsistent with this product supplement, that term sheet or index supplement will supersede this product supplement. Certain capitalized terms used and not defined in this product supplement have the meanings ascribed to them in the prospectus supplement and prospectus. In light of the complexity of the transactions described in this product supplement, you are urged to consult with your own attorneys and business and tax advisors before making a decision to purchase any notesMITTS. The information in this “Summary” section is qualified in its entirety by the more detailed explanation set forth elsewhere in this product supplement, the prospectus supplement, supplement and prospectus, as well as the applicable term sheet and any index supplement. You should rely only on the information contained in those documents. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. Neither we nor any selling agent is making an offer to sell the notes MITTS in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this product supplement, the prospectus supplement, and prospectus, together with the term sheet and any index supplement, is accurate only as of the date on their respective front covers. What are the notesMITTS? The notes MITTS are senior debt securities issued by Bank of America Corporation, and are not secured by collateral. The notes XXXXX will rank equally with all of our other unsecured senior indebtedness from time to time outstanding, and any payments due on the notesMITTS, including any repayment of principal, will be subject to our credit risk. Each series of notes MITTS will mature on the date set forth in the applicable term sheet, unless we call the notes on an . We cannot redeem MITTS at any earlier date, as described in this product supplement and in the applicable term sheet. The notes are We will not principal protectedmake any payments on MITTS until maturity. The notes MITTS are designed for investors who seek an early exit prior are seeking some level of principal protection on their investment at maturity, who want exposure to maturity at a premium if specific Market Measure, and who anticipate that the value of the applicable Market Measure (such as the level of an index index, or the price of a share level of an exchange traded fundExchange Rate Measure (as defined below)) is at or above will increase (or, in the case of bear notesBear MITTS, at or belowdecrease) its applicable Call Level on from the relevant Observation DateStarting Value to the Ending Value over the term of MITTS. You should be willing to lose some or all of your principal if the notes are not called prior to their maturity, and the applicable Market Measure has declined below (or, Investors in the case of bear notes, has increased above) the Threshold Value on the final Observation Date shortly before the maturity date. The notes may or may not pay periodic interest. Unless specified in the applicable term sheet, your notes will not pay interest. You MITTS must be willing to forgo interest payments on your investment (their investment, such as fixed or floating interest rates paid on conventional non-callable debt securities) if . If a Capped Value is specified in the Table of Contents notes are non-interest bearingapplicable term sheet, investors must be willing to accept a return that will not exceed the Call Amountreturn represented by the Capped Value. If your MITTS are less than 100% principal protected at maturity, and you must be willing to bear the risk of loss of all or substantially all some of your investment. You should also be aware that the automatic call feature may shorten the term Table of an investment in the notes, and be willing to accept that your notes may be called on any Observation Date. The Call Level, Observation Dates, Threshold Value, and Call Amount will be set forth in the applicable term sheet. Contents Are the notes MITTS equity or debt securities? The notes MITTS are our senior debt securities, and are not secured by collateral. However, the notes MITTS will differ from traditional debt securities in that their return is linked to the performance of the underlying Market Measure, they will not be principal protected, and unless otherwise specified in the applicable term sheet, you will not receive interest payments. If the notes are called prior to the maturity date, the total cash amount that you will receive as payment on the notes will equal the Call Amount specified Unless indicated in the applicable term sheet, MITTS will be 100% principal protected at maturity, subject to our credit risk. If your MITTS are less than 100% principal protected, then at maturity, instead of receiving the notes are not called prior to the maturity dateOriginal Offering Price of your MITTS, you may receive an amount that is less than the Original Offering Price, depending upon the performance of the Market Measure over the term of the notes. We describe below how this amount at maturity is determined. Will you receive interest on the notes? Unless otherwise specified in the applicable term sheet, you will not receive any interest payments on the notes. If the applicable term sheet provides for the payment of interest on the notes, the applicable term sheet will indicate the relevant terms on which you will receive interest payments. See “Description of the Notes—Interest.” Is it possible for you to lose some or all of your investment in MITTS? MITTS will have some level of principal protection on the notes?maturity date, as specified in the applicable term sheet. If the applicable term sheet provides that your MITTS are not 100% principal protected at maturity (i.e., the Minimum Redemption Amount for your MITTS is less than the Original Offering Price), then you must be willing to lose up to the percentage of your investment specified in the applicable term sheet. • If your MITTS are less than 100% principal protected, and if the Base Value is equal to the Original Offering Price, then you may lose up to the percentage of your investment indicated in the applicable term sheet if the Ending Value is less than (or in the case of Bear MITTS, is greater than) the Starting Value, as described more fully below. • If your MITTS are less than 100% principal protected, and if the Base Value is greater than the Original Offering Price, then you may lose up to the percentage of your investment indicated in the applicable term sheet if the Ending Value decreases (or in the case of Bear MITTS, increases) from the Starting Value by a greater percentage than the percentage difference between the Base Value and the Original Offering Price, as described more fully below. • If your MITTS are less than 100% principal protected, and if the Base Value is less than the Original Offering Price, then you may lose up to the percentage of your investment indicated in the applicable term sheet if the Ending Value does not increase (or in the case of Bear MITTS, decrease) enough to overcome the difference between the Base Value and the Original Offering Price, as described more fully below. The amount of your loss in each case will depend on the magnitude of the change in the value of the Market Measure from the Starting Value to the Ending Value, and the terms of your MITTS. Further, if you sell your MITTS prior to maturity, you may find that the market value per MITTS is less than the Original Offering Price. What is the Market Measure? The Market Measure may consist of one or more of the following: • U.S. broad-based equity indices; Table of Contents • U.S. sector or style-based equity indices; • non-U.S. or global equity indices; • commodity-based indices; • the value of one or more commodities, equity securities or other assets; • any other statistical measure of U.S. or non-U.S. economic or financial performance, including, but not limited to, any currency exchange rate or currency index, consumer price index, mortgage index, or interest rate; or • any combination of any of the above. The Market Measure may consist of a group, or “Basket,” of the foregoing. We refer to each component included in any Basket as a “Basket Component.” If the Market Measure to which your MITTS are linked is a Basket, the Basket Components will be set forth in the applicable term sheet. MITTS may be linked to an “Exchange Rate Measure,” which will track the value of an investment in one or more currency exchange rates (each, an “exchange rate,” and together, the “exchange rates”). Each exchange rate will be expressed as the number of units of one currency (an “underlying currency”) for which one unit of another currency (the “base currency”) can be exchanged. The applicable term sheet or index supplement will set forth information as to the specific Market Measure, including information as to the historical values of the Market Measure. However, historical values of the Market Measure are not indicative of the future performance of the Market Measure or the performance of your MITTS. How is the Redemption Amount calculated? At maturity, subject to our credit risk as issuer of MITTS, and unless the applicable term sheet provides otherwise, you will receive the Redemption Amount per unit of MITTS that you hold, denominated in U.S. dollars. The Redemption Amount will be calculated as follows: • If the Ending Value is greater than the Starting Value, then the Redemption Amount will equal the greater of:
Appears in 2 contracts
Samples: Bank of America Corp /De/, Bank of America Corp /De/
