NEW YORK (
Bank of America
has wrapped up an initial plan to raise capital by selling debt and common stock to retire preferred and trust preferred shares, while leaving open the door for similar transactions in the future.
In a series of recent transactions, Bank of America sold a total of 400 million shares of stock and $2.3 billion in senior debt to retire $5.8 billion worth of preferred and trust preferred securities, the bank disclosed in a
. Bank of America had been prepared to sell as much as $3 billion in senior debt. The transactions added $3.9 billion to so-called tier 1 capital and so represent a strengthening of the company's balance sheet for regulatory purposes.
Bank of America nonetheless is widely considered to be behind peers like
in preparing for a new bank capital regime known as Basel III.
As a result, more equity issuance is expected, with Deutsche Bank analyst Matt O'Connor looking for as much as $15 billion in new issuance from Bank of America in 2012. O'Connor also pointed out that the bank is pushing up against issuance limits, meaning it
for additional issuance.
In its filing Friday Bank of America indicated that it "may, from time to time, engage in similar privately negotiated transactions... in amounts that are not expected to be material, individually or in the aggregate," to the bank.
Written by Dan Freed in New York
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