NEW YORK, March 4, 2026, 09:04 (EST)
- Bank of America has reported new early redemptions on U.S. dollar, euro, and yen notes maturing in 2027.
- Investors are adjusting their expectations for U.S. interest rates and funding costs as the calls come in.
- Bank stocks edged up slightly ahead of the New York session.
Bank of America Corp plans to redeem its entire $2.8 billion outstanding in 1.658% fixed/floating-rate senior notes maturing March 2027 on March 11. Investors will receive the principal plus any accrued interest, according to the bank. Interest ceases to accumulate after the redemption date.
These redemptions aren’t unusual. Still, they’re hitting as bank funding is under the microscope. Investors are back to watching how banks manage the shift from old, low-cost debt to pricier floating-rate deals—and just how much they can keep deposit costs from eating into margins.
Traders have grown skittish on rates. Following a surge in energy prices linked to the Middle East conflict, they’ve pulled back on short-term wagers for Federal Reserve cuts, according to Reuters. Now, anything shifting banks’ interest expenses draws focus.
Bank of America announced Monday it’s set to redeem €1.75 billion in floating-rate senior notes on March 10, paying €1,000 per €1,000 of principal plus any accrued interest. The notes, originally scheduled to mature in 2027, will have their listing and trading canceled on the London Stock Exchange after redemption, pending approval from the UK’s Financial Conduct Authority.
The bank, in a separate announcement, said it plans to redeem ¥27.8 billion of its 0.534% fixed/floating-rate senior notes maturing March 18, 2027. The redemption is set for March 18 at face value plus any accrued interest. According to the notice, payments will be processed through Euroclear and Clearstream.
Senior notes are unsecured, so there’s no collateral behind them. The “fixed/floating” label signals a coupon that’s fixed at first, then flips to a floating rate linked to a benchmark—this can push payments higher if short-term rates stay up. Bank of America, for its part, didn’t explain why it’s calling the notes in its announcements.
Bank of America climbed roughly 0.3% before the bell. JPMorgan Chase edged higher, while Wells Fargo barely moved.
The bank has been relying on interest income as rates shifted over the last year. Back in January, it predicted net interest income would climb 7% for the quarter underway at that time, following a record haul in the previous quarter. CEO Brian Moynihan also described the bank as “bullish on the U.S. economy in 2026.” Reuters
Loan growth remains a sticking point; it shapes funding needs and determines how heavily the bank leans on wholesale markets. Back in January, Chief Financial Officer Alastair Borthwick said, “We’ve seen growth in all of the consumer borrowing categories,” noting the bank is aiming for mid-single-digit loan growth in 2026. Over at JPMorgan Chase, average loans also climbed, while Wells Fargo’s finance chief flagged a pickup in loan growth. Reuters
Still, calling those notes early leaves a larger issue unresolved—what the bank uses to replace that funding. Should volatility ramp up and credit spreads widen, or if rates refuse to dip, tapping the market for refinancing could get pricier. Banks might find themselves returning to issue new debt, possibly facing tougher market terms.
