Bank of America plans relative value Stars on SPDR S&P vs. T-bond fund

By Susanna Moon

Chicago, Aug. 7 - Bank of America Corp. plans to price 0% relative value Strategic Accelerated Redemption Securities due September 2014 linked to the performance of the SPDR S&P 500 exchange-traded fund trust versus the iShares Barclays 20+ Year Treasury Bond ETF, according to an FWP filing with the Securities and Exchange Commission.

The notes will be called at par of $10 plus a premium of 8% to 12% per year if the SPDR S&P fund performs at or above the level of the T-bond fund on any of the three observation dates.

If the notes are not called, the payout at maturity will be par unless the SPDR S&P fund finishes below the T-bond fund by more than 5%, in which case investors will be exposed to any losses beyond 5%.

Bank of America Merrill Lynch is the agent.

The notes will price in August and settle in September.

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