Bank of America is raising capital from what has become, in fairly short order, an unusual source for a U.S. financial services giant: the U.S. markets.
Instead of making a large private placement with some foreign entity, as many of its counterparts are doing — especially in the Middle East — the country’s second-largest bank is raising $6 billion from two preferred securities issues. One is perpetual preferred stock, the other perpetual preferred stock that will convert into common stock.
The company said it intends to use the proceeds for general corporate purposes.
Banc of America Securities LLC will be the sole manager for the convertible stock; for the other issue, additional co-managers will be announced after the offering is under way.
On Tuesday, the bank reported a 95 percent decline in quarterly earnings. It took $5.28 billion in write-offs related to collateralized debt obligations, and set aside an additional $1.74 billion for credit losses. The company this month agreed to buy Countrywide Financial for $4 billion in stock.