December 2, 2011 / 11:06 PM / 8 years ago

BofA spends another $1.1 billion on share exchange

(Reuters) - Bank of America Corp (BAC.N) has issued about $1.1 billion in common stock and senior notes as it continues a previously announced swap for outstanding securities held by institutional investors, according to a filing Friday.

The second-largest U.S. bank said in November that it planned to issue up to 400 million common shares and $3 billion in debt to retire existing preferred shares and trust preferred securities. The move improves a measure of the bank’s capital and eliminates interest payments, but dilutes the holdings of common shareholders.

The bank on November 17 said it had issued shares and senior notes worth about $2.1 billion as part of the plan. In the latest swap, which took place over nine days in November and December, Bank of America issued 125.5 million shares, worth about $677 million at an average price of $5.40, plus senior notes worth $442.3 million.

In return, the bank will receive preferred stock and preferred trust securities from investors worth about $1.3 billion.

The bank has issued about 311 million shares so far in the swap. Before the exchange, Bank of America had about 10.1 billion shares outstanding.

In total, the transactions will boost the bank’s Tier 1 common capital by $2.9 billion.

Reporting by Rick Rothacker in Charlotte, North Carolina; Editing by Gary Hill

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