B Of A Seen Bringing $1-2 Billion To Fund Equity Buyback

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  • 10 Nov 2003
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Bank of America will likely issue $1-2 billion of subordinated debt to buy back equity shares it plans to issue to purchase FleetBoston Financial, according to a pair of analysts who follow the banking sector. The new subordinated debt would likely qualify as "Tier 2" capital, enabling B of A to meet regulatory requirements, according to Joe Labriola, head of U.S. credit research at BNP Paribas. "Within a 90 day window [after an acquisition closes] you always see the acquiring bank come and issue Tier 2 capital," he says. Jeff Kane, global head of high-grade syndicate at B of A, declined comment on any possible issuance and a call to Tom Houghton, the bank's senior v.p. for domestic funding, was not returned.

While the increased supply might cause three to five basis points of widening on outstanding B of A issues, it should recover that premium in less than a quarter, says David Hendler, analyst at CreditSights, who is bullish on the credit in the wake of the proposed merger. "There's a FleetBoston on every corner in Boston, so we think they'll keep their customers, and they'll also get more money out of those customers because B of A has better products," he says.

  • 10 Nov 2003

GlobalCapital European securitization league table

Rank Lead Manager/Arranger Total Volume $m No. of Deals Share % by Volume
1 Bank of America Merrill Lynch (BAML) 7,026 25 11.95
2 Citi 6,449 21 10.96
3 BNP Paribas 5,093 18 8.66
4 Barclays 4,040 11 6.87
5 Lloyds Bank 3,615 14 6.15

Bookrunners of Global Structured Finance

Rank Lead Manager Amount $m No of issues Share %
  • Last updated
  • Today
1 Citi 2,454.09 9 13.89%
2 JPMorgan 1,441.26 6 8.16%
3 SG Corporate & Investment Banking 1,292.64 1 7.32%
3 Rabobank 1,292.64 1 7.32%
5 Bank of America Merrill Lynch 1,226.20 5 6.94%