December 23, 2008

Bank of America Corporation (BAC), a financial holding company, provides a wide range of banking and nonbanking financial services and products to customers in the United States and internationally. The pending merger with Merrill Lynch (MER) will make Bank of America one of the largest financial services companies in the world.

We believe that Bank of America’s balance sheet will ultimately have to be fortified by a Citigroup (C) type of government bailout. As a result, BAC's stock price continues to have substantial downside risk. We are initiating coverage with a SELL rating.