Americas awards: debt and equity-linked

Author: | Published: 25 Mar 2010

Debt and equity-linked deals of the year

WINNER: Bank of America’s Common Equivalent Securities
Bank of America Corporation issued and sold $19.9 billion of a new security in an underwritten public offering. The novel notes are called Common Equivalent Securities and they have two main components.

First, there is a preferred security called a depositary share that automatically converts into common stock upon receipt of stockholder approval to increase the number of shares in the authorised common stock. If approval is not granted, the depositary shares partially convert as the issuer delivers 200 million of its own common shares to be distributed pro rata. Second, there is a contingent warrant for holders to purchase a fraction of a share if approval is denied.

McGuire Woods acted as issuer’s counsel, with Richards Layton & Finger offering representation in Delaware and Cleary Gottlieb Steen & Hamilton providing bank regulatory assistance. Morrison...