Financial markets cheer BofA's stock offering

Charlotte ObserverMay 20, 2009 

Shares of Bank of America Corp. were up about 5 percent at lunchtime today, a day after the Charlotte bank announced it raised nearly $13.5 billion from common investors.

Also today, chief executive Ken Lewis offered some relatively good news to a London audience, saying that the U.K. and the U.S. are “on the cusp of what will turn out to be a slow, but sustainable, economic recovery.”

“For a long time now, it's felt like every time someone asked me when we would begin to see a recovery, the best answer I had was ‘probably a couple of quarters,'” Lewis said, speaking at a conference of a professional group called BritishAmerican Business. “…The good news is that we're finally starting to see some data that supports that view.”

As examples, Lewis cited how housing affordability and confidence among small-business owners are starting to improve modestly. But consumers and investors will remain wary, and regulations are likely to increase, Lewis indicated. Unemployment and credit losses will continue to rise.

The $13.5 billion stock raise, which was offered Friday through Tuesday, is part of Bank of America's plan to meet regulators' demands that it raise common capital to cushion against potential losses. After a government-mandated stress test, regulators told Bank of America to raise nearly $34 billion.

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