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Bank of America's Preferred Stock Surpasses 6% Yield
ByAinvest
Thursday, Aug 7, 2025 3:24 pm ET1min read
Bank of America's Floating Rate Non-Cumulative Preferred Stock, Series E (BAC.PRE) has crossed above a 6% yield due to its quarterly dividend of $1.2619. The shares are trading at a 15.04% discount to their liquidation preference amount, which is higher than the average discount in the "Financial" category. The stock is currently off 0.8% on Thursday, while the common shares are down 0.7%.
Bank of America's Floating Rate Non-Cumulative Preferred Stock, Series E (BAC.PRE), has recently crossed above a 6% yield due to its quarterly dividend of $1.2619. The shares are currently trading at a 15.04% discount to their liquidation preference amount, which is higher than the average discount in the "Financial" category. Despite the yield milestone, the stock is currently off by 0.8% on Thursday, while the common shares are down 0.7%.The significant yield increase comes amidst broader market volatility and rising interest rates. BAC.PRE's floating rate structure benefits from higher benchmark rates, but the discount to liquidation preference suggests investors are cautious about the stock's potential recovery. The current discount is higher than the average discount in the "Financial" category, indicating that investors may be pricing in additional risk.
In comparison, Oaktree Specialty Lending (OCSL) reported a 32.7% YoY drop in adjusted net investment income in Q3 2025, raising concerns about its resilience in rising rate environments [2]. OCSL's conservative strategy, while providing downside protection, has led to a decline in yield and slower deployment, highlighting the challenges of navigating a rate-hiking cycle.
For investors seeking income and capital preservation, BAC.PRE's 6% yield is attractive. However, the stock's discount to liquidation preference and the broader market conditions suggest a need for cautious optimism. Investors should monitor the stock's performance and the overall market trends to make informed decisions.
References:
1. [1] https://www.marketscreener.com/news/intercontinental-hotels-group-plc-declares-interim-dividend-for-2025-payable-on-2-october-2025-ce7c5edfd08dff24
2. [2] https://www.ainvest.com/news/ocsl-q3-2025-earnings-test-credit-strategy-resilience-rising-rate-world-2508/
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