SAN FRANCISCO — BankAmerica, moving to bolster its ailing balance sheet and ward off a takeover threat, Monday asked the Securities and Exchange Commission for permission to issue up to $1.29 billion in new securities.
The troubled parent company of Bank of America filed a shelf registration statement covering $1 billion in subordinated debt and preferred stock, as well as warrants to purchase 10 million shares of common stock.
BankAmerica, based in San Francisco, said it will offer the securities covered by the registration statement "from time to time" after receiving clearance from the regulatory agency. A BankAmerica spokesman said the company is hoping to win clearance and to begin offering the securities for sale in about three weeks.
Industry sources said Monday that BankAmerica has already been in touch with a number of large institutional investors, including some Japanese banks.
The specific terms of the securities--including any conversion, redemption or voting rights--will be set forth at the times of the offerings. A shelf registration, once it is approved, authorizes a company to offer the securities in question for up to two years, keeping them on the "shelf" in the meantime.
"They are keeping their options wide open," said Donald K. Crowley, a senior vice president and banking industry analyst with the securities firm of Keefe, Bruyette & Woods in San Francisco.
Crowley said he expects that, in the short term, BankAmerica will issue only about $500 million of subordinated debt and preferred stock.
Besides the $1 billion in subordinated debt and preferred stock, the registration statement covered up to $40 million worth of common stock warrants and up to $250 million in common stock.
The common stock is likely to be made available for exchange, at some future date, for the subordinated debt and the preferred stock at a maximum price of $25 a share, analysts said.
BankAmerica had 154.9 million shares of common stock outstanding as of Dec. 31. The stock closed Monday at $14.25, down 25 cents.
BankAmerica has been fighting a hostile acquisition bid from First Interstate Bancorp.
Los Angeles-based First Interstate has offered to buy BankAmerica for a package of securities that First Interstate values at $3.2 billion, or $21 for each of BankAmerica's shares.
BankAmerica's registration statement contained few surprises, reiterating details of the company's restructuring program and restating BankAmerica's opposition to First Interstate's offer.
But the registration statement did provide the first detailed 1986 financial results for BankAmerica's soon-to-be-divested Charles Schwab & Co. discount stock brokerage unit. In 1986, Schwab posted net income of $66 million on total revenues of $509 million--while its beleaguered parent had a net loss of $518 million despite $411 million in gains on the sale of various assets.
BankAmerica said proceeds of the offerings will be used primarily to finance the lending and leasing activities of its subsidiaries.