CHARLOTTE, N.C. ( TheStreet) -- Bank of America (BAC - Get Report) saw strong demand for its TARP-busting secondary offering late Thursday, selling half a billion dollars more in securities than it originally envisioned at a discount of less than 5% to its common stock.
Shares of the nation's largest bank were holding up well following news overnight of the details of the offering, which is pegged to generate gross proceeds of $19.3 billion through the sale of "common equivalent securities" -- consisting of depositary shares and warrants to purchase common stock -- that priced at the equivalent of $15 per common share.
Bank of America shares finished Thursday at $15.76, up a little more than a dime. Trading in the wake of the company's surprise announcement of its TARP repayment plans late Wednesday was volatile. Nearly 650 million shares changed hands on Thursday, well beyond the issue's trailing three-month daily average of 185.2 million. The stock rose as high as $16.74 during the session, a gain of 7%, before selling off. Shares were recently quoted at $15.75 in premarket trades, a penny lower.
When Bank of America announced its TARP repayment plan, it said it was targeting a capital raise of $18.8 billion, so the offering exceeded that goal by a fair amount. Next on the agenda will be the actual payback of TARP, which a Bank of America spokesman told TheStreet on Thursday could take place in a matter of days. The government will still have some exposure to Bank of America through warrants, but the company doesn't plan to deal with those just yet.