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Bank of America Gains as Citigroup Says It May Have Sold Shares
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By David Mildenberg
May 18 (Bloomberg) -- Bank of America Corp. rose 9.2 percent in New York trading after Citigroup Inc. said the lender may have raised as much as $4 billion issuing common shares and Goldman Sachs Group Inc. upgraded the company.
Regulators told Bank of America to raise $33.9 billion after conducting stress tests to assess its ability to weather a prolonged recession. The bank expects to boost its common equity capital by $17 billion through the sale of stock and by converting preferred shares mostly held by institutional investors, Chief Executive Officer Kenneth Lewis said May 7.
Bank of America probably issued 250 million to 300 million shares since May 8, valued at $3 billion to $4 billion, Keith Horowitz, a Citigroup banking analyst, said in a report dated yesterday. Horowitz reached his estimate based on trading volume and the company’s share prices last week.
Bank of America increased 98 cents to $11.65 at 9:38 a.m. in New York Stock Exchange composite trading. Charlotte, North Carolina-based Bank of America had no comment on Horowitz’s report, spokesman Jerry Dubrowski said.
Goldman Sachs raised Bank of America to “buy” from “neutral” today, saying the lender may earn 25 cents a share during the second quarter. The average estimate of 21 analysts compiled by Bloomberg is for 2.5 cents.
Fitch Ratings downgraded several Bank of America preferred stock issues in a report today, calling the $33.9 billion capital raising “a daunting task in any environment.” Building its capital base depends on the bank’s ability to sell shares, divest assets at sufficient prices and report profit above projections made in the stress test, Fitch said in the report.
Bank of America may post a $4 billion post-tax gain on the sale last week of 13.5 billion China Construction Bank Corp. shares, Horowitz said. The lender is also considering selling its Columbia Funds asset management group and First Republic Bank, a private bank acquired through its purchase of Merrill Lynch & Co.
To contact the reporter on this story: David Mildenberg in Charlotte at [email protected]
Last Updated: May 18, 2009 09:54 EDT
Share | Email | Print | A A A
By David Mildenberg
May 18 (Bloomberg) -- Bank of America Corp. rose 9.2 percent in New York trading after Citigroup Inc. said the lender may have raised as much as $4 billion issuing common shares and Goldman Sachs Group Inc. upgraded the company.
Regulators told Bank of America to raise $33.9 billion after conducting stress tests to assess its ability to weather a prolonged recession. The bank expects to boost its common equity capital by $17 billion through the sale of stock and by converting preferred shares mostly held by institutional investors, Chief Executive Officer Kenneth Lewis said May 7.
Bank of America probably issued 250 million to 300 million shares since May 8, valued at $3 billion to $4 billion, Keith Horowitz, a Citigroup banking analyst, said in a report dated yesterday. Horowitz reached his estimate based on trading volume and the company’s share prices last week.
Bank of America increased 98 cents to $11.65 at 9:38 a.m. in New York Stock Exchange composite trading. Charlotte, North Carolina-based Bank of America had no comment on Horowitz’s report, spokesman Jerry Dubrowski said.
Goldman Sachs raised Bank of America to “buy” from “neutral” today, saying the lender may earn 25 cents a share during the second quarter. The average estimate of 21 analysts compiled by Bloomberg is for 2.5 cents.
Fitch Ratings downgraded several Bank of America preferred stock issues in a report today, calling the $33.9 billion capital raising “a daunting task in any environment.” Building its capital base depends on the bank’s ability to sell shares, divest assets at sufficient prices and report profit above projections made in the stress test, Fitch said in the report.
Bank of America may post a $4 billion post-tax gain on the sale last week of 13.5 billion China Construction Bank Corp. shares, Horowitz said. The lender is also considering selling its Columbia Funds asset management group and First Republic Bank, a private bank acquired through its purchase of Merrill Lynch & Co.
To contact the reporter on this story: David Mildenberg in Charlotte at [email protected]
Last Updated: May 18, 2009 09:54 EDT
