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Dec 4, 2009
BOA equity sales
US$19.3b of securities sold
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Bank of America Corp sold more than US$19 billion of equity on Thursday to help repay government bailout funds the bank took at the height of the financial crisis. -- PHOTO: AFP
NEW YORK - BANK of America Corp sold more than US$19 billion of equity on Thursday amid strong investor interest as it races to shed government regulatory curbs that have bedeviled its CEO search. The money raised will help repay US$45 billion (S$62.2 billion) in government bailout funds the bank took at the height of the financial crisis as it struggled with heavy writedowns stemming from its acquisitions of mortgage lender Countrywide and investment bank Merrill Lynch. The bank had previously said it planned to sell securities next Monday, but moved the sale forward because of demand. The size of the deal grew to US$19.29 billion of common equivalent securities, from an originally planned $18.8 billion, according to a pricing document sent to investors and obtained by Reuters. The securities sold at US$15 each, about 5 per cent below where Bank of America shares closed on Thursday. The securities will convert to common stock once equity investors approve an increase in authorized Bank of America shares. The bank's shares fell to US$15.58 in aftermarket trading. The offering is the biggest yet in a year that has seen at least 100 US banks sell stock to strengthen their capital as they sustained losses from mortgages, credit card debt and business loans. Chief Financial Officer Joe Price said on a conference call with investors the bank was seeing signs of credit stabilization and that managed losses on credit cards had plateaued. 'Consumers continue to experience stress ... however we are seeing signs of stabilisation,' Mr Price said. -- THOMSON REUTERS
Home > Breaking News > Money > Story
Dec 4, 2009
BOA equity sales
US$19.3b of securities sold
<!-- end left side bar -->
Bank of America Corp sold more than US$19 billion of equity on Thursday to help repay government bailout funds the bank took at the height of the financial crisis. -- PHOTO: AFP
NEW YORK - BANK of America Corp sold more than US$19 billion of equity on Thursday amid strong investor interest as it races to shed government regulatory curbs that have bedeviled its CEO search. The money raised will help repay US$45 billion (S$62.2 billion) in government bailout funds the bank took at the height of the financial crisis as it struggled with heavy writedowns stemming from its acquisitions of mortgage lender Countrywide and investment bank Merrill Lynch. The bank had previously said it planned to sell securities next Monday, but moved the sale forward because of demand. The size of the deal grew to US$19.29 billion of common equivalent securities, from an originally planned $18.8 billion, according to a pricing document sent to investors and obtained by Reuters. The securities sold at US$15 each, about 5 per cent below where Bank of America shares closed on Thursday. The securities will convert to common stock once equity investors approve an increase in authorized Bank of America shares. The bank's shares fell to US$15.58 in aftermarket trading. The offering is the biggest yet in a year that has seen at least 100 US banks sell stock to strengthen their capital as they sustained losses from mortgages, credit card debt and business loans. Chief Financial Officer Joe Price said on a conference call with investors the bank was seeing signs of credit stabilization and that managed losses on credit cards had plateaued. 'Consumers continue to experience stress ... however we are seeing signs of stabilisation,' Mr Price said. -- THOMSON REUTERS
