SAN FRANCISCO, OCT. 7 -- BankAmerica, moving to replenish its loan-loss-ravaged capital, today increased the size of a proposed offering of securities by $75 million, to $425 million.
The total includes $250 million in floating-rate notes and warrants to be sold to Japanese banks, $100 million in convertible preferred stock to be sold to Japanese insurance companies and $75 million in floating-rate notes and warrants to be offered to the public in the United States and abroad.
Although banking industry sources said the Japanese had exacted stiff concessions from the parent of Bank of America during the lengthy negotiations, a BankAmerica spokesman said today that the "essential terms" had "not changed significantly" since they were first proposed by BankAmerica earlier this year.
The 12-year notes will pay their holders an interest rate of 1.25 percentage points above a commonly used benchmark rate for three-month securities in London. The London rate -- known as Libor -- stood at 8.5625 percent today.
BankAmerica had initially sought an interest rate of 1 percentage point above the London benchmark, as well as an interest rate cap of 12 percent.
The notes will be sold together with warrants that are convertible into BankAmerica common stock at an exercise price $17.50 per share.
Each $100,000 worth of notes will include warrants giving the purchaser the right to buy 2,500 shares of BankAmerica common; if all the warrants are exercised, BankAmerica will issue 8.125 million shares. The warrants will expire in 10 years.
BankAmerica common, which has been depressed as a result of the corporation's loan losses, management upheaval, financial scandals and other woes, closed today at $11.50 a share on the New York Stock Exchange, up 25 cents.
The preferred stock, with a stated value of $1,000 a share, will have a fixed dividend of 9.5 percent and be convertible into BankAmerica common shares at $17.50 per common share.
If all the warrants are exercised and all the preferred shares converted, BankAmerica will issue an additional 13.9 million common shares -- less than 10 percent of the 155 million common shares now outstanding.