WRAPUP 4-BofA, other U.S. banks scramble for capital

Bank of America has said it plans to plug roughly half its $33.9 billion capital shortfall by issuing new common stock, and to make up the rest through asset sales and other means.

The bank sold just over one-third of its roughly 16.7 percent China Construction Bank stake to investors including Singapore's state-run Temasek Holdings [TEM.UL], China Life Insurance Co (601628.SS) (2628.HK) and China's Hopu Investment Management Co, the person involved in the sale said.

Bank of America owns other shares in the Chinese bank that it cannot sell before Aug. 29, 2011. Chief Executive Kenneth Lewis said on Monday: "We always want to have a very large ownership position."

Separately, U.S. Bancorp's $2.5 billion stock sale comprised 139 million shares at $18 each. Bank of New York Mellon's $1.2 billion stock sale, 20 percent larger than expected, comprised 42 million shares at $28.75 each.

The shares priced at 3 percent discounts to Monday closing prices, which is normal for offerings of additional shares.

Wells Fargo & Co (WFC.N) and Morgan Stanley (MS.N), found under their stress tests to need more capital, sold a respective $8.6 billion and $4 billion of stock on Friday.

KeyCorp (KEY.N), told to raise $1.8 billion of capital, is selling $750 million of stock. Chief Executive Henry Meyer at the UBS conference said the bank might also sell assets or change preferred shares into common stock to cover the shortfall. It took $2.5 billion from TARP.

Capital One Financial Corp (COF.N), found to have no shortfall, sold $1.55 billion of stock on Monday.

In Tuesday trading, Bank of America shares fell 5.3 percent to $12.26, U.S. Bancorp fell 3.3 percent to $17.89, Bank of New York Mellon fell 3.8 percent to $28.43, BB&T fell 7.6 percent to $22.50, and KeyCorp fell 4.5 percent to $6.00. (Reporting by Michael Flaherty and Jonathan Stempel; Editing by Tim Dobbyn, Gerald E. McCormick and Steve Orlofsky)