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Bank of America Sells Biggest Note Tied to MidCap Index in 2012

Bank of America Corp. sold $23.8 million of 14-month notes tied to the Standard & Poor’s MidCap 400 Index, the largest offering linked to the benchmark in more than a year.

The securities, issued Nov. 29, yield three times the gains of the index up to 14.7 percent with no protection against losses, according to a prospectus filed with the U.S. Securities and Exchange Commission. Investors can lose all of their investment if the index plummets. The bank distributed the notes for a 2 percent fee.

Matt Card, a spokesman for Bank of America, declined to comment on the offering.

The S&P MidCap 400 Index, which comprises the stocks of 400 U.S. companies with market capitalization of $1 billion to $4.4 billion, gained 14 percent this year to 999.8 as of closing yesterday. The broader Standard & Poor’s 500 Index rose 12 percent this year to 1,409.3.

Royal Bank of Canada had the biggest previous offering on Sept. 29 of last year, $24.4 million of 14-month notes that yielded three times the index’s gains, capped at 26.34 percent with no loss protection, according to a prospectus filed with the SEC.

To contact the reporter on this story: Kevin Dugan in New York at kdugan4@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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