Bank of America Corp. plans to sell most of its remaining stake in China Construction Bank for $6.6 billion cash, in the ailing bank's latest move to boost capital levels.
In the last three months, Bank of America has agreed to sell nearly $15 billion of CCB shares, a holding acquired in 2005 to cement Bank of America's strategic relationship with the Chinese bank and give it a stake in the fast-growing Asian economy.
Now Bank of America is under pressure to build capital to cover mortgage-related assets and to meet new international standards.
The bank probably would have preferred to hold on to the shares, said Gary Townsend, chief executive of investment firm Hill-Townsend Capital in Maryland. But BofA needs to focus on its main businesses and is trying to build capital without issuing more common stock, he said.
"This is still a company under significant stress," Townsend said. "They have a great deal to prove, so they are raising more capital."