Bank of America Corporation's Series E preferred stock, listed under tickers including BAC'E and BAC-PE, has sat callable by the issuer since November 15, 2011, yet remains outstanding nearly fifteen years later, trading on October 5 at $18.70, according to the security's SEC-verified data sheet. That price sits roughly 25.2% below the stock's $25 liquidation preference, a gap that first stood out in data tracked on Preferred Stock AI, a Madison Labs research site.
The security is a variable-rate, non-cumulative perpetual preferred, meaning Bank of America can skip dividends without owing investors back pay if it chooses, and the shares carry no maturity date. Issued in November 2006 with an initial dividend rate of 4.00%, the series now pays 4.88% annually, equal to $1.22 per $25 share, for a current yield of 6.52% at the prevailing market price. The dividend rate is pegged to the greater of three-month LIBOR plus 0.35% or a 4.00% floor, a structure that has carried over to three-month SOFR following the industry-wide retirement of LIBOR as a benchmark rate.
For income-focused investors, the combination of a long-callable structure and a floating coupon raises a practical question: why has Bank of America not redeemed a series it has had the contractual right to call since 2011? One reading of the public dividend history is that the floating-rate design has kept the coupon from drifting far enough above current market yields to make redemption economically urgent for the issuer, since quarterly payouts have moved with short-term rates, declining from roughly $0.38 per share in late 2023 to roughly $0.26 to $0.28 per share through 2025 and into 2026 as short-term benchmark rates eased. That pattern is drawn directly from the dividend history published alongside the security and is not a statement of Bank of America's intentions, which the company has not disclosed publicly in connection with this series.
The wide discount to par matters to investors because it changes the arithmetic of holding the shares. A buyer purchasing at $18.70 who eventually saw the stock redeemed at its $25 liquidation preference would capture $6.30 of price appreciation, a 33.7% gain on the purchase price, separate from any dividends collected along the way. But because the stock is callable immediately and perpetual if not called, there is no guaranteed date by which that gap would close, and the yield-to-call metric on the security's profile is marked "not applicable" precisely because redemption could happen at any time or not at all.
Background on the series ties it to a broader cohort of bank-issued preferred stock from the mid-2000s that used LIBOR-linked floating structures, many of which have since been amended under the federal Adjustable Interest Rate (LIBOR) Act to reference SOFR-based replacement rates without requiring a formal reissuance. Bank of America has continued to issue new preferred series in the years since, including several fixed-rate offerings disclosed in SEC prospectus filings, giving the bank a wide range of capital instruments at different coupons and call structures across its balance sheet.
The current trading context for BAC'E sits against a backdrop of broadly flat Treasury yields as investors await Federal Reserve meeting minutes, a dynamic that tends to have an outsized effect on floating-rate and income-oriented preferred securities since their payouts move with short-term benchmark rates rather than long-term yields. Bank of America's common stock, by comparison, traded at $54.00 on the same date, up modestly on the day, with a 52-week range of $46.12 to $65.22, reflecting a very different set of investor considerations than the preferred series, which is priced primarily on yield and call risk rather than growth expectations.
Going forward, participants in the preferred market are likely to watch two things tied directly to this security: whether Bank of America exercises its long-standing call right on the Series E shares, and how the quarterly dividend resets as SOFR itself moves. Neither outcome is predictable from the public data alone, and Bank of America has not issued guidance specific to this series' redemption timeline. The security's own profile notes it is verified against its SEC prospectus filing, with the underlying 424B5 document available for investors seeking the original offering terms in full.