Bank of America says it raised $13.5 billion via stock sales

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Bank of America Corp. has made more progress filling the capital hole on its balance sheet: The bank said Tuesday that it has raised $13.5 billion since May 8 by selling new shares to investors.

The sales were made via so-called at-the-market offerings, which entail continuously selling shares to investors during regular trading hours at or near prevailing market prices. BofA said it sold 1.25 billion shares at an average price of $10.77 a share.

But that extra supply in the market weighed on the price of the stock, which fell from $14.17 on May 8 to $11.25 Tuesday, a 21% drop. By contrast, the average big-bank stock slid 13% in the period.

BofA had 6.4 billion shares outstanding before the offering, so the newly issued shares diluted existing shareholders’ stakes by about 20%.

‘We’re pleased to have this portion of our capital plan completed,’ Chief Financial Officer Joe Price said in a statement.

BofA’s regulators on May 7 told the bank to raise $34 billion by November after the government’s ‘stress test’ on 19 major banks found 10 to be short of capital.

BofA Chief Executive Ken Lewis has pledged to bridge the gap by issuing new common stock, converting private investors’ preferred stock, selling assets and boosting earnings.

But the company’s investors may not learn the specifics until after the fact.

‘There is no set formula in how much of each category we need to accomplish,’ spokesman Jerry Dubrowski told Bloomberg News on Tuesday. ‘We have a target and we’ve talked about a number of different ways to get there.’

-- Tom Petruno