Bank of America Corporation has let a group of its preferred stock series sit on the market well past the dates on which it could have redeemed them, and the discount to face value is substantial. Series BAC'N, a 5% non-cumulative perpetual preferred with a $25 liquidation preference, has been callable since September 17, 2024, yet closed at $17.82 on October 29, 2026, according to pricing shown on the security's listing. That is a discount of roughly 28.7% to its $25 par value, producing a current yield of 7.01% against the original 5% coupon. The pattern extends to three other series, BAC'M, BAC'K and BAC'B, all trading between 13% and 29% below par despite having passed their respective call dates. This cluster first stood out in data tracked on Preferred Stock AI, a Madison Labs research site.
The mechanics explain why this is happening without any wrongdoing on the bank's part. A call date simply gives the issuer the option, not the obligation, to redeem preferred shares at par. Once that date passes, the decision to call becomes a straightforward cost comparison for the issuer: redeem the old shares and replace them with new capital, or keep paying the existing dividend. For a 5% coupon preferred like BAC'N, refinancing with a new issue would likely require offering a comparable or higher rate in the current environment, given that market pricing already implies a 7.01% yield on the existing shares. Leaving the security outstanding, even while it trades below the $25 investors originally paid, can be the cheaper path for the issuer.
For preferred shareholders, the arithmetic cuts differently. An investor who bought BAC'N at issuance in September 2019 and still holds it is sitting on a price well under their original cost basis, with no clear sign the bank intends to call the shares and return capital at $25. The security continues to pay its quarterly dividend, most recently $0.3125 per share as of the September 2026 ex-date, and it is non-cumulative, meaning Bank of America would not be obligated to make up any missed payment if one occurred, though no missed payments are indicated in the dividend history provided. New buyers at the discounted price lock in the higher current yield but take on the uncertainty of not knowing when, or whether, a call might eventually happen.
The broader backdrop adds context without explaining the preferred pricing directly. Bank of America's common stock closed at $51.14 on October 29, 2026, down from a 52-week high of $65.22 and closer to its 52-week low of $46.12. The common shares have been in the news cycle for reasons unrelated to the preferred securities: Senator Elizabeth Warren asked the Department of Justice to investigate the bank over alleged money laundering violations, and multiple law firms have publicized securities fraud litigation related to the company, according to wire items circulated on October 29, 2026. Separately, BAC'N's original 2019 prospectus shows the $18.8 billion offering of related securities was used to repurchase preferred stock the bank had issued to the U.S. Treasury under the Troubled Asset Relief Program, a reminder that some of Bank of America's capital structure still traces back to its post-financial-crisis recapitalization.
Market conditions that day were also choppy well beyond bank stocks. Major cryptocurrencies including Bitcoin and Ethereum fell more than 3% over 24 hours, and large technology names such as Alphabet and ServiceNow posted double-digit percentage declines amid broader concern over artificial intelligence spending, according to trading data and reporting circulating during the same session. None of that volatility is tied directly to Bank of America's preferred securities, but it illustrates a market environment in which capital costs and investor risk appetite are both in flux, factors that can influence whether banks choose to call outstanding preferred issues.
Looking ahead, investors holding or considering these Bank of America preferred series are likely to watch two things: any announcement from the bank regarding redemption of BAC'N, BAC'M, BAC'K or BAC'B, and the trajectory of interest rates that would make refinancing more or less attractive relative to the shares' original coupons. Upcoming ex-dividend dates will continue to generate quarterly payments regardless of call status, and the next SEC-verified update to each security's call eligibility will offer the clearest signal of the bank's intentions. Until Bank of America acts, the gap between market price and par value on these series remains open, a detail market participants can track alongside the bank's common share performance and any developments tied to the legal and regulatory matters currently in the news.