Bank of America - preferred stock

Bank of America joined the group of banks hosing existing shareholders with a mammoth - $12 billion- preferred stock issuance. With one $6 billion tranche paying a dividend effectively yielding 8% and the other $6 billion yielding 7.25% and some conversion features, us long-time common holders should expect slower dividend growth.

I actually think Ken Lewis is a good CEO and generally has done a good job. However, somewhere B of A started lowering its standards, or holding paper with poorly evaluated risk. We can only hope that a market eventually develops for the CDO's, CLO's or whatever toxic paper is on their balance sheet, and they reverse some of the write-offs.

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