Banking & Finance

Another $15 Billion In New Capital (AXP, JPM, MS, BAC)

Money Stack ImageThe waves of capital raising continues.  American Express Company (NYSE: AXP), JPMorgan Chase & Co. (NYSE: JPM), Morgan Stanley (NYSE: MS), and Bank of America Corporation (NYSE: BAC) are just the leading financial institutions which have announced new capital raising efforts.  The price tag is massive when you add these up: almost $15 billion.

American Express sold $500 million in a 19.8 million share offering priced at $25.25.  Shares closed at $25.99 on Monday and are down at $24.95 before the open.

JPMorgan Chase & Co. (NYSE: JPM) raised about $5 billion in a 142 million share offering priced at $35.25.  Shares closed at $36.11 on Monday and are down around $35.25 before the open.

Morgan Stanley (NYSE: MS) today raised about $2.2 billion in a 80.2 million share offering priced at $27.44.  Shares closed at $29.89 on Monday and are down close to $28.50 before the open.

Bank of America Corporation (NYSE: BAC) said that it has now raised ‘almost’ $33 billion toward its $33.9 billion for the Fed’s capital buffer.  Just last week, the bank noted it had raised ‘almost’ $26 billion.  That being said, in just a few days it seems that B of A raised some $7 billion in additional capital, assuming this was via a real capital raise on an implied basis rather than just via preferred share redemptions. To date, Bank of America has entered into agreements with certain holders of (non-government) perpetual preferred shares to exchange their holdings of approximately $9.5 billion of perpetual preferred stock into approximately 704 million shares of common stock. This results in a total benefit to Tier 1 common capital of $9.5 billion.  Its stock is down 0.3%  at $11.19 right before the open.

The reason for these capital raises is not just working capital.  These banks and institutions want to get out from under the TARP as soon as possible.

JON C. OGG
June 2, 2009

Sponsored: Find a Qualified Financial Advisor

Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.