Warren Buffett Still Has His Meat Hooks in Bank of America (BAC)
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Price: $56.02 +1.56%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.1%
EPS Growth %: +23.6%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 2.1%
EPS Growth %: +23.6%
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With its Fed-approved capital plan tonight, Bank of America Corp. (NYSE: BAC) announced that it will redeem $5.5 billion in preferred stock in addition to a $5 billion share repurchase plan.
Given that he is a preferred stock owner in the company, the news may have made legendary investor Warren Buffett blink. However, it looks like the Oracle's preferred stock investment wasn't included in the redemption.
Bank of America is redeeming the 8.20% Non-Cumulative Preferred Stock, Series H, will be redeemed on May 1, 2013, and the 8.625% Non-Cumulative Preferred Stock, Series 8, will be redeemed on May 28, 2013. Mr. Buffett owns the Series T.
On September 1, 2011, the Corporation closed the sale to Berkshire Hathaway, Inc. (Berkshire) (NYSE: BRK-A) of 50,000 shares of the Series T Preferred Stock and a warrant (the Warrant) to purchase 700 million shares of the Corporation’s common stock for an aggregate purchase price of $5.0 billion in cash.
The Series T Preferred Stock has no maturity date and ranks senior to the outstanding common stock with respect to the payment of dividends and distributions in liquidation. At any time when dividends on the Series T Preferred Stock have not been paid in full, the unpaid amounts will accrue dividends at a rate per annum of eight percent and the Corporation will not be permitted to pay dividends or other distributions on, or to repurchase, any outstanding common stock or any of the Corporation’s outstanding preferred stock of any series. Following payment in full of accrued but unpaid dividends on the Series T Preferred Stock, the dividend rate remains at eight percent per annum.
Given that he is a preferred stock owner in the company, the news may have made legendary investor Warren Buffett blink. However, it looks like the Oracle's preferred stock investment wasn't included in the redemption.
Bank of America is redeeming the 8.20% Non-Cumulative Preferred Stock, Series H, will be redeemed on May 1, 2013, and the 8.625% Non-Cumulative Preferred Stock, Series 8, will be redeemed on May 28, 2013. Mr. Buffett owns the Series T.
On September 1, 2011, the Corporation closed the sale to Berkshire Hathaway, Inc. (Berkshire) (NYSE: BRK-A) of 50,000 shares of the Series T Preferred Stock and a warrant (the Warrant) to purchase 700 million shares of the Corporation’s common stock for an aggregate purchase price of $5.0 billion in cash.
The Series T Preferred Stock has no maturity date and ranks senior to the outstanding common stock with respect to the payment of dividends and distributions in liquidation. At any time when dividends on the Series T Preferred Stock have not been paid in full, the unpaid amounts will accrue dividends at a rate per annum of eight percent and the Corporation will not be permitted to pay dividends or other distributions on, or to repurchase, any outstanding common stock or any of the Corporation’s outstanding preferred stock of any series. Following payment in full of accrued but unpaid dividends on the Series T Preferred Stock, the dividend rate remains at eight percent per annum.
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