Banking, finance, and taxes
B of A: Raising Capital and Not Raising Capital (BAC)
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Is Bank of America Corporation (NYSE: BAC) raising more capital or is it not? It depends upon which news service you believe. The FT reported that the company was seeking to raise as much as $10 billion in new capital. Now we have stories from both Bloomberg and from CNBC that the bank has denied the FT report
Either way, a capital raise at this point right before the stress test results are due would be (or would have been) a total credibility blow to Bank of America management and CEO Ken Lewis. The company could probably justify a capital raise if it was used to immediately pay back TARP money, but anything outside of that would be a credibility destroyer.
After the developments of last week and the months before this, that is something the bank and that shareholders cannot afford.
JON C. OGG
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