BofA halfway through $33bn capital after stock issuance

Bank of America has raised roughly $13bn after it sold 1.25 billion new shares of common stock, a little over 60% of which (or 825 million were done on Tuesday) while the rest were sold previously. This puts the firm a step closer to completing its $33.9 billion capital requirement from the stress test by the Treasury. Shares were sold for $10, more than 10% below its price on Tuesday.

The move also helps the bank stay away from further capital infusion from the government or the conversion of its preferred that could make it the biggest shareholder of the firm.  Other sources of capital are the sale of its stake in China Construction Bank, which provided additional $7.3bn and the conversion of privately held preferred shares.

CFO Joe Price said in a statement released: “We are pleased to have this portion of our capital plan completed. This strengthens and diversifies our capital structure.”

Sources: Bloomberg, WSJ

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s