Bank of America
Pulled back from SPACs in 2022
Fees Earned
$600.0M
SPACs Underwritten
40
Bankrupt SPACs
2
Bankruptcy Rate
5.0%
Overview
Bank of America was a selective but significant participant in the SPAC boom. The bank earned an estimated $600 million in SPAC underwriting and advisory fees. BofA focused on larger, higher-profile deals but still underwrote several that resulted in massive losses for investors. The bank quickly distanced itself from SPACs when the tide turned, quietly stopping new SPAC work.
Average Client Return
Average return for investors who held SPAC-merged companies underwritten by Bank of America. The bank collected its fees at IPO regardless of subsequent performance.
Notable Deals
The Fee Structure Problem
SPAC underwriters like Bank of America typically earned 2% of the IPO proceeds upfront, with an additional 3.5% deferred fee paid at deal completion. On 40 SPAC IPOs, this generated approximately $600.0M in fees.
Crucially, these fees were earned regardless of whether the SPAC found a good target or whether investors made money. The deferred fee was paid from the trust at merger completion — meaning the bank had every incentive to push mergers through, even with subpar targets.