Bank of America
Yes, that is the security’s official name.
It means that one share of this “depository share,” issued at $25, is equal to 1/1000th a share of the actual preferred stock, which costs $25,000 each. Don’t get confused, though. It’s really just a share of stock that happens to represent a fraction of a larger share of stock.
This particular security is non-cumulative, however. That means that if Bank of America (BAC), for whatever reason, decides it can’t or won’t pay a dividend on this series of preferred stock, then you won’t accrue those unpaid dividends as often is the case with other preferred series. It is also callable in October 2017, meaning the company can buy back the shares after that date. The security trades at $25.62, so the effective yield is 6.46%.
I’ve watched Bank of America for some time, hold the common, and think it’s on very solid ground. Investors may be interested to know that BofA offers many different types of preferred stock, as well — some of which are carryovers from other firms that BofA purchased, such as Merrill Lynch.