Today, Bank of America Corporation announced that it is commencing an offer to exchange up to 200 million shares of newly-issued common stock for outstanding depositary shares of certain series of its preferred stock at an exchange ratio that represents a discount ($3.01 billion) to the applicable liquidation preference ($13.26 billion) of the preferred depositary shares. In addition, the actual number of shares of common stock that a holder will receive in consideration for each exchanged depositary share is further dependent on Bank of America's “Common Stock Average Price” defined as the average of the daily per share volume-weighted average price of its common stock on the NYSE for each of the five consecutive trading days ending on and including June 22, 2009, which is the second business day prior to the scheduled expiration date of the exchange offer. If successful, the exchange offer will assist Bank of America in "meeting our goal of increasing our Tier 1 common capital level (together with other actions)" to the $33.9 billion capital buffer requirement announced by the Federal Reserve as part of its Supervisory Capital Assessment Program (SCAP) results.

Bank of America has raised $26 billion in its capital plan. Last week, the company raised $13.5 billion through the issuance of 1.25 billion shares of common stock and earlier this year, Bank of America sold part of its holdings in China Construction Bank resulting in a pretax gain of $1.9 billion. In addition, Bank of America has entered into other agreements with certain holders of (non-government) perpetual perferred shares to exchange $5.9 billion of preferred shares into 436 million shares of common stock resulting in a total benefit to Tier 1 common capital of $5.9 billion. Subject to market conditions, Bank of America stated that it "could issue up to an additional 564 million shares of common stock through additional exchanges of (non-government) perpetual preferred shares for common stock."