WHEN: Today, Wednesday, December 2nd
WHERE: CNBC's "Fast Money"
Following is the unofficial transcript. All references must be sourced to CNBC.
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MELISSA LEE: WE WANT TO BREAK IN HERE BECAUSE WE DO HAVE SOME BREAK NEWS. OUR ON-AIR EDITOR CHARLIE GASPARINO HAS SOME NEWS ON BANK OF AMERICA.WHAT DO YOU HAVE?
GASPARINO: IT AIN'T KEN LEWIS LEAVING BUT IT'S THE NEXT BEST THING.BANK OF AMERICA IS OUT OF THE T.A.R.P. PROGRAM.THEY'RE GOING TO PAY $45 BILLION BANK.AND THIS DEAL HAS BEEN REACHED IMMINENTLY. NEXT COUPLE MINUTES THEY'RE GOING TO SIGN, SEAL, AND DELIVER IT -- I'M GOING THROUGH MY NOTES HERE. THEY'RE RAISING CAPITAL THE NEXTFEW DAYS. SO THIS IS HAPPENING AS WELL SPEAK IT IS A PRETTY BIG STORY
LEE: THEY'RE RAISING CAPITAL THE NEXT FEW DAYS, WHICH MEANS ESSENTIALLY THEY'RE GOING TO HAVE AN OFFERING, WHICH MEANS ESSENTIALLY THAT THE STOCK WOULD BE DILUTED.
GASPARINO: WELL, MAYBE.BUT THEY'RE GOING TO PAY BACK T.A.R.P., AND THEY'RE GOING TO SAY, LISTEN, WE HAVE GREAT CAPITAL LEVELS, WE HAVE SOME OF THE BEST CAPITAL LEVELS IN THE BUSINESS. SO I THINK THIS IS A PRETTY BIG STORY. THIS IS KEN LEWIS'S LAST ACT AS CEO. HE WANTED TO GET IT DONE. HE BASICALLY ARRANGED GREG CURL, ONE OF THE CEO CANDIDATES TO DO THIS.THIS PUTS A FEATHER IN GREG CURL'S CAP. HE MAY HAVE THE INSIDE TRACK. I MEAN IF IT WAS GOING ON FOR ABOUT THREE OR FOUR WEEKS. SO THIS IS A FAIRLY SIGNIFICANT THING AT B OF A. AND I THINK, YOU KNOW, ITS YOUR GAME PLAN AS THE CEO SUCCESSIONTHIS IS GREG CURL'S WAY IN. I THINK THIS BASICALLY PUTS HIM IN THE LEAD RIGHT NOW.BECAUSE THIS IS A PRETTY BIG THING.REMEMBER, T.A.R.P. IS SOMETHING EVERYBODY WANTS TO GET OUT OF. THE GOVERNMENT CONTROLS THE PAY.JUST HAVING TO DEAL WITH BARNEY FRANK EVERY --
LEE: I WOULD IMAGINE, THOUGH, CHARLIE, ONCE THE GOVERNMENT'S OFF BANK OF AMERICA'S BACK SO TOSPEAK BY PAYING BACK THE T.A.R.P. IT WOULD GIVE THEM THE LEEWAY TO GO SEARCH OUT ANOTHER CEO OUT THERE WHO MIGHT NOT CONSIDER THE JOB NOW BECAUSE OF THE PAY RESTRICTIONS.
GASPARINO: YEAH, BUT I THINK POLITICALLY GREG CURL -- I MEAN, THIS IS GREG CURL'S TEAM WHO DID THIS. THERE'S A WOMAN NAMED ANN FANYUKIN WHO WORKED THE POLITICAL END AND DID A GREAT JOB TRYING TO CONVINCE THE FED MORE OR LESS, CONVINCE THE TREASURY THAT B OF A SHOULD BE OUT OF THIS THING. AND IT'S GREG CURL TRYING TO STRATEGIZE, AND HE'S RAISING CAPITAL.I JUST THINK POLITICALLY, I'M NOT SAYING HE'S GOT THE JOB. I'M SAYING POLITICALLY THE FACT THAT HE'S THE GUY LEADING THE EFFORT THAT THEY GOT OUT OF T.A.R.P. AND THEY ARE, FROM WHATI UNDERSTAND, ABOUT TO SIGN THESE DOCUMENTS ANY MINUTE NOW WITH THE FED, ONCE THEY'RE OUT I THINK THAT GIVES HIM A LEG UP.AT LEAST REMEMBER, HE'S 63. YOU COULD MAKE THE POINT THAT HE'LL BE IN THERE FOR TWO YEARS AND THEY'LL KEEP LOOKING FOR SOMEONE ELSE. AND ONCE THEY'RE OUT OF T.A.R.P., THE CEO JOB BECOMES A LITTLE MORE PALATABLE, DOESN'T IT? NOT REALLY UNDER THE THUMB OF THE FEDERAL GOVERNMENT THAT MUCH.BUT THE BREAKING NEWS IS THIS. THEY'RE GOING TO BE OUT OF T.A.R.P., THEY'RE GOING TO RAISEMONEY. THEY'RE PAYING BACK THE $45 BILLION.AND I THINK YOU HAVE TO -- IT'S A PROCESS YOU GO THROUGH. BUT THEY'RE OUT. THEY'RE GOING TO RAISE CAPITAL.THEY'RE GOING TO SAY, I BELIEVE, THEY'RE GOING TO SAY ONCE THEY RAISE CAPITAL, THEY'RE GOING TO HAVE SOME OF THE STRONGEST CAPITAL RATIOS ON THE STREET. REMEMBER, THAT WAS A BIG THING.I THINK DICK BOVE WAS SAYING THEY NEEDED TO RAISE CAPITAL BECAUSE THEY HAD SOME CAPITAL ISSUES.I THINK HE SAID ON "FAST MONEY."SO THIS IS HOW THEY'RE MOVING FORWARD WITH THIS.THIS IS A BIG THING.AND YOU KNOW, ANOTHER THING THEY'RE GOING TO BE SAYING IS THAT THIS IS KEN LEWIS'S LAST ACT.IT'S HOW HE -- HE WANTED TO DO THIS BEFORE HE LEFT THE FIRM --
LEE: WHAT A WAY TO SAVE YOUR OWN REPUTATION, CHARLIE.KAREN'S GOT A QUESTION.
FINERMAN: I'VE GOT A QUESTION. DO YOU THINK THIS IS ALL EQUITY,WHICH IS IT'S A LOT OF EQUITY IFIT'S 45 BILLION, LET'S JUST ROUND IT OFF AND SAY THEY DO IT AT 15 --
GASPARINO: THAT'S A GOOD QUESTION -- I DON'T KNOW I'LL FIND OUT MORE
FINERMAN: THAT'S 3 BILLION SHARES. IT'S EXTREMELY DILUTIVE.
GASPARINO: YOU HAVE TO REALIZE, I'M SURPRISED THIS DIDN'T LEAK SOONER.THE SIMPLE REASON IS THEY'VE BEEN SPENDING LIKE THE LAST TWO MONTHS IN WASHINGTON, YOU KNOW, TRYING TO NAIL THIS THING DOWN. AND ONCE YOU'RE IN WASHINGTON TALKING TO PEOPLE IN THE ADMINISTRATION, OBVIOUSLY YOU'RE PROBABLY TALKING TO SOME OF THE KEY CONGRESSIONAL LEADERS IN THEBANKING COMMITTEE. ONCE YOU'RE DOING THAT, YOU KNOW, THINGS START TO LEAK. BUT YOU KNOW, I FOUND OUT ABOUT THIS TODAY JUST AS THEY WERE ABOUT TO SIGN THE DEAL. AND FROM WHAT I UNDERSTAND THE DEAL IS SIGNED.AND I THINK THAT'S A GREAT QUESTION. DO THEY DO DEBT?DO THEY DO AN EQUITY OFFERING? BUT KAREN, YOU MAY KNOW THIS BETTER THAN ME.IN TERMS OF THE CAPITAL RATIOS WHAT'S BETTER? PART OF THE SPIN THAT'S GOING TOCOME OUT OF THIS IS THEY ARE AMONG THE MOST STRONGLY CAPITALIZED BANKS IN THE COUNTRY.
FINERMAN: I DON'T KNOW IF IT'S SOME OF THAT CONDITIONAL CAPITAL THEY'VE BEEN TALKING ABOUT WHERE ONLY INCERTAIN CIRCUMSTANCES IS IT CONSIDERED CAPITAL, THEN IT CONVERTS IN THE EVENT OF SOME DISTRESS TO THE BALANCE SHEET.I DON'T KNOW IF THAT'S WHAT THIS IS --
GASPARINO: RIGHT.
FINERMAN: ONE OTHER THING, THOUGH, BACKTO CURL, IT WOULD JUST SEEM WITH THE TORTURED HISTORY HERE THAT WHY WOULDN'T THE BOARD JUST MOVE ON TO SOMEBODY NEW, SOMEBODY WHO IS NOT PART OF THE -- ADMINISTRATION
GASPARINO: THAT'S A GREAT QUESTION. I MEAN, I O'COULD JUST TELL YOU THIS. THEY FEEL THIS IS -- IF THERE'S TWO WATERSHED EVENTS COMING OUT OF BANK OF AMERICA OVER THE NEXT COUPLE WEEKS, AND WE KIND OF BROKE IT HERE ON "FAST MONEY."ONE WAS I BROKE THIS STORY ABOUT KEN LEWIS LEAVING. THE SECOND IS WHEN ARE THEY GOING TO PAY BACK TARP? AND THIS IS A PRETTY BIG EVENT FOR BANK OF AMERICA. IT MOVES THEM OUT OF THIS SORT OF GOVERNMENT SORT OF STRANGLEHOLD. AND HE'S THE GUY THAT DID IT. YES, WITH ANN FANYUKIN DOING THE PUBLIC POLICY. THIS GUY NAMED GREG BAER WHO WORKED A LOT OF THE REGULATORY PEOPLE. BUT THIS IS GREG CURL'S SORT OF -- THIS WAS HIS EFFORT.AND IT WAS ONE OF THE LAST THINGS THAT KEN LEWIS WANTED TO DO BEFORE HE WAS LEAVING. YOU KNOW WHAT'S KIND OF INTERESTING, THERE'S BEEN A LOT OF STORIES ABOUT KEN LEWIS MAYBE STAYING ON LONGER. I THINK WITH THIS DONE I THINK HE'S DEFINITELY GONE. THIS WAS THE THING HE WANTED TO DO BEFORE HE LEFT. AND YOU KNOW, HE ACCOMPLISHED IT.
FINERMAN: DO YOU THINK IT MAKES --
GASPARINO: YOUR QUESTION IN TERMS OF WHAT TYPE OF CAPITAL -- AND YES,WHAT DOES THIS DO FOR THE SUCCESSION PROCESS? I THINK IT GIVES HIM A BOOST. I COULD BE WRONG.
LEE: I THINK IT GIVES THE BOARD LATITUDE TO GO FIND SOMEBODY ELSE AND SAY HEY, GUYS, COME ANDBE THE CEO, WE'VE GOT THE GOVERNMENT OFF OUR BACK RIGHT NOW AND YOU CAN DO ANYTHING YOU WANT AND WE CAN PAY YOU ANYTHINGWE WANT TO PAY YOU.
GASPARINO: BY THE WAY, I DON'T KNOW THEIR BALANCE SHEET THAT WELL BUT I MEAN WHEN THEY PAY THIS BACK, HOW DO THEY PAY IT BACK IN DO THEY DO IT IN CONJUNCTION WAYCAPITAL RAISE?HOW MUCH MONEY COULD YOU CONCEIVABLY RAISE RIGHT NOW?WHERE'S THEIR STOCK TRADING TODAY?
FINERMAN: IT'S TRADING AROUND 15.50.
LEE: IT'S DOWN IN THE AFTER HOURS.
GASPARINO: THEY COULD RAISE CAPITAL --
FINERMAN: THEY RAISED $33 BILLION SINCE THEY ANNOUNCED THE RESULTS OF THE STRESS TEST. I WONDER IF THIS PUTS PRESSURE ON WELLS FARGO WHO STILL HAS T.A.R.P. MONEY, WHETHER THEY'LL FEEL THE NEED TO --
GASPARINO: HAVING TARP, BEING IN TARP, PUTS YOU AT SOMEWHAT OF A COMPETITIVE DISADVANTAGE, RIGHT?IT'S HARD TO BRING PEOPLE IN.I INTERVIEWED THIS GUY KEN FINEBERG, THE PAY CZAR THE OTHERDAY. HE'S THE GUY WHO GOES OVER ALL THE PAY OF THE BANKING SECTORS OF THE PEOPLE IN THE T.A.R.P. PROGRAM. HE IS REALLY CONTROLLING THE SALARIES OF EVERYBODY.HOW ARE YOU GOING TO ATTRACT GOOD PEOPLE WHEN KEN FINEBERG HAS TO MAKE A DETERMINATION WHETHER YOU SHOULD BE PAID X OR Y?IT'S NOT THE MARKET. IT'S KEN FEINBERG AND HIS INTERPRETATION OF WHAT NANCY PELOSI AND BARNEY FRANK THINK YOU SHOULD BE PAID. THAT'S ESSENTIALLY WHAT HE TOLD ME. SO THEY'RE OUT OF THAT.I THINK THAT GETS THEM A BOOST AND PUTS PRESSURE ON WELLS FARGO. I GUESS CITIGROUP.I CAN'T IMAGINE CITIGROUP'S LEAVING THE T.A.R.P. PROGRAM ANYTIME SOON.
LEE: YOU MAY HAVE SAID THAT ABOUT BANK OF AMERICA YESTERDAY, CHAZ.
GASPARINO: NO, NO, NO.I MEAN, THEY'RE A HEALTHIER BANK, OBVIOUSLY, SOMEWHAT HEALTHIER.BUT I'M JUST SAYING THAT THIS RAMPS UP THE COMPETITIVE PRESSURE IT HELPS THEM IN A LOT OF DIFFERENT WAYS. MERRILL LYNCH IS PART OF BANK OFAMERICA.MERRILL LYNCH HAS INVESTMENT BANKERS. THERE'S THE DUDE FROM EUROPE. I FORGET HIS NAME.
NAJARIAN: THE DUDE.
GASPARINO: DOESN'T EXACTLY TRADE BONDS. DOESN'T TAKE A LOT OF RISK BUT HE MAKES MONEY AND HE BRINGSIN LOTS OF DEALS.AND HE COULDN'T BE PAID BECAUSE THEY WERE IN T.A.R.P. NOW THEY'LL BE PAID --
LEE: CHAZ, WE WANT TO LET YOU HIT THE PHONES ONCE AGAIN. WE'LL CHECK IN WITH YOU MUCH LATER. AND OF COURSE CHARLIE GASPARINO BREAKING THE RULES RIGHT HERE ON "FAST MONEY" THAT BANK OF AMERICA WILL BE REPAYING THE T.A.R.P., $45 BILLION WORTH.
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