Many analysts raised their view on Bank of America Thursday including FBR Capital, which upgraded the stock to outperform from market perform reflecting its positive view on BofA’s move to repay TARP.
As you likely know, after the bell Wednesday, BofA stunned the Street by announcing it would pay all $45 billion in TARP funds -- and as a result -- wriggle free from government restrictions on executive pay as well as other restrictions that come along with bailout funds.
Perhaps the most important aspect of these developments – at least to traders -- was the announcement that BofA would sell up to $18.8 billion in securities that will convert into common stock once shareholders approve an increase in its share count. (The remainder of the $45 billion would be repaid through $26.2 billion in cash.)
Although the offering was originally scheduled for Monday, the bank said because of strong demand, it offered its shares sooner. In fact, after hours Thursday Bank of America Corp sold more than $19 billion of equity amid stronger than expected investor interest.
The securities sold at $15 each, about 5 percent below where Bank of America shares closed on Thursday.