Bank of America sells $7.3B of China Construction Bank stock

HONG KONG -- Bank of America has sold part of its stake in China Construction Bank for some $7.3 billion as the U.S. bank seeks to boost its capital cushion to the level recommended by federal regulators.

Bank of America unloaded more than 13.5 billion shares, or a nearly 6% stake, in China Construction, the Chinese company said.

The stock sale still leaves Bank of America with about 11% of CCB's shares.

"Bank of America will continue to be a major shareholder of China Construction Bank and we will continue to be a strategic partner," said Bank of America spokesman Robert Stickler.

The Charlotte, N.C.-based bank was widely expected to sell some of its stake after a lockup period expired this month and the U.S. government's "stress tests" showed the bank would need to raise nearly $34 billion to withstand a deepening recession. The bank's current stake is in a lockup period for another two years.

Buyers included China Life Insurance and its affiliates, an unidentified foreign fund and BOCI Asia, an investment banking arm of the Bank of China. China Construction is the country's second-biggest lender.

"It's a normal market behavior. CCB thinks it's understandable," CCB said on the company's website. The stake was valued at 4.2 Hong Kong dollars per share.

Bank of America officials have also said they are considering sales of its Columbia asset management unit, as well as several other businesses, and may enter several joint ventures. The bank previously said it planned to sell its First Republic Bank unit, which it inherited when it bought Merrill Lynch. Those sales could help raise $10 billion.

Another $17 billion will likely be raised by issuing more common stock, and the rest of the capital could come from cash flow from operations in the coming quarters, Bank of America has said.