BofA Prices 825 Million Shares at $10 a Piece
By: Bank of Americahas priced 825 million shares at $10 each, sources familiar with the offering told CNBC.
Bank of America also is considering an exchange of preferred for common shares, but no details on the size of that exchange were available.
The sale price is 11.1 percent below Bank of America's $11.25 closing price on Tuesday. The bank's shares, which briefly dropped about 5 percent in late trading, later were close to flat.
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"We're pleased to have this portion of our capital plan completed," Chief Financial Officer Joe Price. "This strengthens and diversifies our capital structure."
A sale of stock would help the bank, America's biggest, lender raise capital, after regulators told it to bolster its finances following a government "stress test" of its ability to handle a deep recession.
Ten of the 19 large U.S. banks that underwent such tests were told this month to raise capital, with Bank of America's $33.9 billion shortfall being by far the largest.
Bank of America has said it plans to raise $17 billion of common equity. It said this could involve the issuance of 1.25 billion common shares, and involve the conversion at less than face value of some preferred shares held by private investors.
The bank has said it plans to raise roughly $17 billion more from asset sales and other means. Last week, it sold part of its stake in China Construction Bank for $7.3 billion.
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- Reuters contributed to this report.
