BofA talks $250 million in cash-settled notes tied to Voya to yield 0% to 0.25%, up 37.5% to 42.5%

By Abigail W. Adams

Portland, Me., April 4 – BofA Finance LLC plans to price $250 million in five-year cash-settled equity-linked notes tied to Voya Financial Inc. after the market close on Thursday with price talk for a coupon of 0% to 0.25% and an initial conversion premium of 37.5% to 42.5%, according to a market source.

BofA Merrill Lynch is the sole bookrunner for the registered offering. The notes will be issued with a minimum purchase of $100,000 and whole multiples of $1,000 above that.

The notes are non-callable and have no put options. There is standard dividend protection above 1 cent per quarter and a make-whole adjustment premium upon a change of control.

The notes may be converted for cash during the 10 trading days following the May interest payment date, beginning on May 1, 2019, if the product of the price multiplier and Voya common stock is greater than or equal to the initial reference price for 20 out of 30 trading days, according to a 424B2 filing with the Securities and Exchange Commission.

A make-whole event will occur if there is a change of control of Voya or it merges or sells its assets. In that case, holders will receive a make-whole payment but will not be able to convert the notes and will receive par at maturity.

The initial reference price will be determined after a five-day averaging period.

BofA Finance LLC is a subsidiary of Bank of America Corp., a Charlotte, N.C. -based financial institution, which will guarantee the notes.

Voya Financial is a New York, New York-based investment and insurance company.

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