Bank of America Cashing Out of China Corp

Unable to pilfer enough cash from the working stiffs US, Bank of America is cashing out of China construction Bank to the tune of nearly $3 billion.

The Bank of America raised $2.83 billion from selling part of its holding in China Construction Bank, and Hong Kong’s richest tycoon followed by selling a $500 million stake in its rival, Bank of China.

Bank of America sold more than 5.62 billion Construction Bank shares at 3.92 Hong Kong dollars each, according to a term sheet obtained by Reuters, in a deal that had been widely anticipated by the market.

Bank of America realizes a profit of about $1.13 billion on the stake sale, based on Construction Bank’s initial offering price. It sold the stake at a 12 percent discount to the stock’s Tuesday close.

“The news has been expected but investors will still take it hard because BoA will most definitely sell more,..

Of course they'll sell more Bank of America is desperate for cash. the offloading of shares of China Construction Bank comes as two months after the bank doubled down in China Corp. and announced that they were long term best friends.

Bank of America will exercise its option to buy shares in China Construction from China SAFE Investments Ltd., Bank of America said Monday. The U.S. bank said it expects the transaction to be completed by the end of this month.

The purchase ends speculation that Bank of America might consider selling some its stake to raise as much as $10 billion to blunt effects of the global financial crisis. In May, Bank of America paid 14.5 billion Hong Kong dollars, or $1.87 billion, to buy 6 billion shares from China Construction, raising its ownership to 10.8 percent. The large Chinese bank said last month that third- quarter profit increased 12 percent on higher interest income.

"Bank of America intends to remain a long-term and significant strategic investor in CCB," the bank said in its statement.

Well if two months is a long-term strategic investment; what's a long-term marriage? And it's interesting the rumors were swirling in November that Bank of America was selling to raise $10 billion which they raised from the government instead. Convenient!

Anyway you look at it the cash raising for Bank of America will go on and on and on, for now they tack on another $2.8 billion to their capital raising total.