That's right. Bank of America Corp. (NYSE:BAC) has
shored up nearly all of the $33.9 billion that regulators told the bank to raise after last month's stress tests.
"Bank of America hopes to use the majority of the proceeds from these
initiatives to reduce reliance on government support for the company," the
press release stated.
How did it get there so quickly?
Clusterstock's Joe Weisenthal does a great job breaking down those numbers
- $9.5 billion from preferred stock conversion
- $13.5 billion from common stock sale
- Gain from the sale of China Construction Bank
- $2.1 billion tax gain
- $1.3 billion from dividend savings
- $2 billion from other dispositions
While the bank may be in the clear, one analyst says BofA needs to raise even more cash if it intends to
repay TARP. Deutsche Bank AG's Matthew O'Connor says an extra $5 billion to $10 billion will be necessary for the bank to raise due to a requirement from the Federal Reserve, according to
Bloomberg.
Where would that money come from? Well, the bank could issue up to an additional 296 million common shares, according to its
press release, and then there are some assets the bank has said it may want to sell off,
including:
- First Republic Bank
- Columbia asset management unit
- BlackRock Inc.
- Merrill Lynch & Co.'s overseas brokerages in Europe, Asia and Latin America
Then again, if BofA
waits for the market to improve, the bank could always pay back TARP by
spinning off Merrill Lynch. Either way, you know CEO Ken Lewis is
sleeping a little better at night. - Maria Woehr
Follow me on twitter @newsgirlmw
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