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Bank of America sells 400M shares, $2.3B in debt

NEW YORK — In an effort to strengthen its balance sheet, Bank of America in the first two weeks of December sold 400 million common shares and issued $2.3 billion in debt to replace $5.8 billion of preferred stock.

The preferred stock was more expensive for Bank of America Corp.’s balance sheet because it paid investors annual dividends of 5.25 percent to 8.25 percent.

The Charlotte, N.C., bank made the disclosure in a regulatory filing.

The nation’s second largest bank by assets has been selling assets recently as it races to clean up its balance sheet ahead of the annual stress test conducted by the Federal Reserve, the chief banking regulator in the U.S. Last year, Bank of America was the only bank to fail the test among the four largest U.S. banks.