Bank of America Corp. BAC, -1.04% filed a shelf registration Monday with the Securities and Exchange Commission to allow it to issue up to $123 billion in debt securities, warrants, preferred stock and equity securities over time. Proceeds of any offerings will be used for working capital, to fund investments in or credit to subsidiaries, to repay debt, to invest in other businesses and for general corporate purposes. Shares were down 0.2% but have gained 26% in the year to date, while the S&P 500 SPX, -0.18% has gained 17%.
Is this normal? $123 billion seems like a lot of money, especially for a fairly conservative bank like Bank of America. Some factoids for context:
- Bank of America recently beat earnings expectations, but news wasn’t all good.
- Bank of America is hiring a team to explore crypto, but it seems to be at very preliminary stages.
- And of course it is now allowed to do share buy backs.
But none of these things seem to explain the need for $123 billion. Anyone have any ideas?