Bank of America Files $20 Billion Offering

123jump.com Staff
09 May, 2009
New York City

Bank of America filed to raise $17 billion in common stock and $3 billion offering debt that is not guaranteed by the FDIC. The bank had Tier 1 capital ratio of 10.1% and Tier 1 common capital ratio of 4.49% at the end of the first quarter.

[R]11:45AM New York – Bank of America moved to raise $17 billion in common stock offering and $3 billion offering debt that are not guaranteed by the FDIC.[/R]

Fed regulators asked Bank of America to raise $34 billion before November 9 and required it file a plan of action before June 8.

Bank of America ((BAC)) filed to sell 1.25 billion in common shares to complete the offering in the next few weeks. At Friday’s close price the offering may raise $17.8 billion, regulators have asked banks to add capital buffer of $35 billion.

The bank also filed to raise $3 billion of senior notes of 7.375% due May 2014. The debt is not guaranteed by the FDIC.

The bank in a presentation on its Web site noted that it may raise $17 billion in common stock offering, among other sale may sell First Republic and asset manager Columbia Management and sell assets in its portfolio. The bank will also exchange preferred stock at less than par for common stock. The bank also plans to save $7 billion in expenses in ‘other improvements pre-tax pre-provision earnings’ in the second and third quarters.

The bank had Tier 1 capital ratio of 10.09% and Tier 1 common capital ratio of 4.49% at the end of the first quarter ending in March 2009.

The bank has total equity of $239.55 billion and Tier 1 capital of $171.06 billion. For regulatory measures the equity capital is reduced by goodwill, minority interests and certain intangible assets to calculate tier 1 capital.

Bank of America ((BAC)) stock closed up 4.9% or 66 cents to $14.17 in Friday’s trading.