Bank of America Corporation (BAC) said Friday that it has raised $19.3 billion U.S. as part of a securities sale aimed at helping pay off the company's massive TARP debt.
The banking giant said recently that it is planning to pay off its $45-billion U.S. bailout debt. It will use existing liquidity, as well as funds generated from the securities sale, to do just that.
BAC sold 1.286 billion in "common equivalent securities," which are comprised of a depositary share and one warrant. The shares are to be convertible into one common share, subject to shareholder approval. Essentially, the company has engaged in a huge share offering, without actually issuing shares yet, while it waits for shareholder approval for the offering.
The company had previously raised some $13.5 billion U.S. through a 1.25-billion share offering back in May.
Bank of America shares fell 29 cents, or -1.8%, in premarket trading Friday.
The Bottom Line
Shares of BAC were recently removed from some experts’ "recommended" list back on Oct.1, when the stock was trading at $16.92 U.S.
The company has a .56% dividend yield, based on last night’s closing stock price of $15.76 U.S. The stock has technical support in the $14 U.S. price area. If the shares can firm up, there could be some overhead resistance around the $20 U.S. price level. But experts remain on the sidelines for now.
Bank of America Corporation (BAC) is not recommended at this time, holding a Dividend.com DARS Rating of 3.4 out of 5 stars.
