BofA raises more than $19 billion, on track to make good with the feds

Posted Dec 4th 2009 8:00AM by Tom Johansmeyer
Filed under: Bank of America (BAC), Recession, Financial Crisis

As planned, Bank of America (BAC) sold securities to raise the capital it needs to settle with the government. The company announced this week that it would repay the $45 billion in bailout money it received under the Troubled Asset Relief Program (TARP). Bank of America raised $19.3 billion, slightly more than the $18.8 billion it originally sought.

Bank of America sold 1.286 billion "common equivalent" securities, which are comprised of a depositary share and a warrant. The security is convertible into one common share of Bank of America, upon approval by shareholders. The rest of the money will come in the form of cash.

Shares in the company advanced 0.7% by Thursday's close on the news of the successful sale.

Jason Brady, managing director at Thornburg Investment Management, told Bloomberg News, "It's a good thing for Bank of America, it's a healthy thing and it needs to happen," he says of the securities sale and plans to repay the TARP money. His company's Thornburg Income Builder Fund has a position in Bank of America bonds.

The bank is also planning to increase equity by selling $4 billion in assets. And it will issue $1.7 billion in restricted stock to be used for year-end bonuses.

After $1.7 trillion in write-downs were caused by the financial crisis last year, financial services firms have raised $1.5 trillion in capital to rebuild their balance sheets.

Tags: bac, Bank of America, inthenews, tarp, Thornburg, Troubled Asset Relief Program, TroubledAssetReliefProgram

Print this

Reader Comments (Page 1 of 1)

12-04-2009 @ 9:41AM

Richard Newman said...

Great! Ken Lewis wanted the TAPR funds to be repaid before he retired and that is a great accomplishment. Get the government and Geithner off BA's back. Notice this is a step backward for Obama, the socialist buddy of Hugo. Obama's scheme to nationalize the banks takes a step backward.

12-04-2009 @ 10:08AM

nickerson said...

Watch out BOA, Obama is talking with CHAVEZ to find out how he can screw you ten times over, will have you giving the people who brought down the country in the first place, will have you giving money to ACORN and the bros and sisters in the projects who work at big Mac and living on the taxpayers with food stamps and little Obama money.