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Even Non Stress Test Banks Raising Money

Published: Monday, 11 May 2009 | 9:11 AM ET

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By: Bob Pisani
Reporter

Futures are weak as commodities and commodity stocks are down, along with some financials which have announced secondary offerings today.

Predictably, bears have been arguing that stocks are overpriced for nearly two weeks now, and there is some evidence they are at least fairly priced, since the S&P is now trading at 16x forward earnings.

There is more talk now about protecting gains that making huge advances.

Elsewhere:

1) Several banks announced they would be joining Wells Fargo [WFC Loading... () ] and Morgan Stanley [MS Loading... () ] in raising money, even though some of them did not have to under the stress test.

BB&T, [BBT Loading... () ] for example, announced a $1.5 billion common stock offering, even though they were not required to do so, and will be using the money to pay back the TARP (they took $3.1 billion in TARP money). They are also cutting their dividend 68 percent to $0.15 from $0.47.

Same with Capital One and US Bancorp [USB Loading... () ] : they too did not need to raise capital under the stress test, but are doing so.

Capital One [COF Loading... () ] filing a 56 million share secondary, which they will use to repurchase stock and warrants under the TARP ($3.6 billion was invested from TARP).

US Bancorp, which took $6.6 billion in TARP money, is raising $2.5 billion in common stock and $1 billion in notes.

KeyCorp [KEY Loading... () ] will sell $750 million in common shares. They do need to raise $1.8 billion under the stress test (they took $2.5 billion in TARP money).

Finally, Principal Financial [PFG Loading... () ], which was not even part of the stress test, said they were selling 42.25 million shares of common for "general corporate purposes."

2) Agrium [AGU Loading... () ] boosts its offer for CF Industries [CF Loading... () ] to $85.20 (an increase of $5 a share), $40 in cash plus 1 share of Agrium for each share of CF, a 15 percent premium to Friday's close.