Bank of America article updated with dividend announcement and reference to recent layoff announcements.

NEW YORK ( TheStreet) -- Bank of America ( BAC) said it has issued $2.1 billion worth of common stock and senior debt in exchange for preferred stock and trust preferred securities worth $2.7 billion.

In a filing on Thursday evening, the bank said it had issued more than 185 million common shares, raising about $1.1 billion as of Thursday's close. It also issued $998.1 million of senior notes.

In exchange, the bank will receive preferred shares worth $590.4 million and Trust Preferred Stock with a liquidation preference of $ 2.1 billion. The exchange is expected to settle on or before November 23.

The exchange will result in an increase of $1.88 billion in Tier 1 Capital, an improvement of 14 basis points to the Tier 1 Common Capital ratio.

The bank had previously announced that it intended to issue upto 400 million common shares and $3 billion in senior notes to effectively replace roughly $6 billion of higher cost preferred stock and trust preferred securities, in order to take advantage of current market conditions where the market values of Bank of America's debt and preferred shares are trading below par.

The move is expected to save the bank interest and dividend and boost capital, but will dilute common shareholders.

Bank of America also announced a quarterly cash dividend on common stock of a penny per share, payable on Dec. 23 to shareholders of record as of Dec. 2.

The bank also declared a quarterly dividend of $1.75 per share on the 7 percent Cumulative Redeemable Preferred Stock, Series B payable on Jan. 25, 2012 to shareholders of record on Jan 11.

Bank of America confirmed Friday it had begun layoffs, part of a plan previously announced by CEO Brian Moynihan to eliminate 30,000 jobs at the bank "over the next few years."

-- Written by Shanthi Bharatwaj from New York
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