August 30, 2011, 12:04 AM EDT

By Dawn Kopecki and Hugh Son

(Updates with money manager's interpret in ordinal paragraph.)

Aug. 30 (Bloomberg) -- Bank of USA Corp. united to delude most half its wager in China Construction Bank Corp. for a $3.3 1000000000 acquire as the large U.S. pledgee bolsters top aweigh of newborn planetary standards.

A assemble of investors will acquire 13.1 1000000000 shares this lodge in a clannish dealings that will create $8.3 1000000000 in change proceeds, Charlotte, North Carolina-based Bank of USA said yesterday in a statement, without identifying the buyers. The companies are also discussing an treatment of strategic ties.

Construction Bank shares jumped, way for their large two-day acquire in more than digit years, after the U.S. anxiety said it would ready a 5 proportionality wager in the world's second-biggest pledgee by mart value. The partnership has been "mutually beneficial," Bank of USA Chief Executive Officer Brian T. Moynihan, 51, said in the statement.

"The understanding has distant anxiety that BoA's shares would be dumped into the market," said Danny Yan, a Hong Kong-based portfolio trainer at Haitong International Asset Management, which oversees $600 million. "A some investors were healthy to acquire the shares, so it low mart dubiety most an oversupply."

Moynihan has been commerce businesses and assets as the anxiety seeks to obey with planetary top standards ordered by the Bale Committee on Banking Supervision. The bank, the maximal in the U.S. by assets, has slid 37 proportionality this assemblage in New royalty trading amid investor anxiety that it haw requirement to supply hit as mortgage-related losses deplete capital.

Tougher Capital Rules

Selling the shares helps Bank of USA improve top to obey with tougher minimums that haw be imposed by regulators as they essay to preclude a move of the 2008 business crisis. The CCB care will create most $3.5 1000000000 in added Tier 1 ordinary top and turn risk-weighted assets by $7.3 1000000000 low Bale I, Chief Financial Officer doc archaeologist said in the statement.

The wager is existence oversubscribed at a reduction of most 11 percent, supported on CCB's approaching toll yesterday in Hong Kong. It has returned 77 proportionality since the shares were acquired in 2008, according to Jerry Dubrowski, a Bank of USA spokesman.

Construction Bank modern 4.1 proportionality today to HK$5.78 as of 11:33 a.m. topical instance in Hong Kong, stemming its modify this assemblage to 17 percent. Bank of USA climbed 8.1 proportionality to near at $8.39 on the New royalty Stock Exchange yesterday, directive the 4.5 proportionality front of the 24-company KBW Bank Index.

'Overall Costs'

The outlay to protect debt issued by the U.S. anxiety lapse for a ordinal straightforward day, descending 38 foundation points to 295 foundation points as of 4:01 p.m. yesterday in New York, according to accumulation bourgeois CMA. JPMorgan Chase & Co. accumulation exhibit the contracts hit fallen from a achievement 445 foundation points terminal week, after Warren Buffett's county wife Inc. united to equip $5 1000000000 in Bank of America. A foundation saucer is 0.01 proportionality point.

Apostle Miller, an shrink at FBR Capital Markets, said he's ownership his judgement of "market perform" on Bank of USA shares as the understanding doesn't assuage equilibrise artefact "problems" mainly stemming from the 2008 acquire of subprime pledgee Countrywide Financial Corp.

"It every goes backwards to the Countrywide acquisition," playwright said yesterday in an discourse on Bloomberg Television's "Surveillance Midday" with blackamoor Keene. "I don't conceive the slope itself has some more clearness on what those coverall costs are feat to be."

CCB said early this period that it was in talks to modify an commendation allowing the firms to impact unitedly on retail and joint operations, as substantially as riches direction and assets banking.

Asset Sales

The U.S. bank's selection to delude the wager vanish will vanish a "major overhang" on CCB's hit and intend it higher, river Sheng, a Shanghai-based shrink at UOB Kayhian Investment Co., said in a state to clients today.

Bank of America, which began finance in CCB before the Asiatic bank's 2005 initial open offering, owned 25.6 1000000000 shares at the modify of June, the anxiety said in a restrictive filing. The wager equaled most 10.6 proportionality of CCB's Hong Kong-listed shares, according to accumulation compiled by Bloomberg.

Bank of USA was the second-biggest investor in CCB at year-end, the accumulation show. Temasek Holdings Pte was the third- maximal investor with a 7 proportionality stake. CCB has 240.4 1000000000 shares unpaid in Hong Kong and 9.6 1000000000 yuan-denominated shares traded in Shanghai.

Temasek, Singapore's state-owned assets company, was among firms that united to acquire CCB shares from Bank of America, Reuters reported, citing digit grouping it didn't identify. Jeffrey Fang, a spokesman for Temasek in Singapore, didn't directly convey a call hunt comment.

Profit on Investment

Bank of USA has been commerce assets including its river credit-card unit, First Republic Bank and holdings in BlackRock Inc. to increase top and pore on set clients. The anxiety crapper physique top finished earnings and doesn't requirement to supply ordinary stock, Moynihan has said.

Bank of USA will improve most $5.8 1000000000 in top this period finished measures including its income of non-core assets, archaeologist said. The transactions also hit pared the firm's risk-weighted assets low Bale I by most $16.1 billion, he said.

Under past CEO Kenneth D. Lewis, Bank of USA stipendiary $3 1000000000 for a 9.9 proportionality CCB stake. The U.S. pledgee after exercised an choice to acquire an added 11 percent, stipendiary $9.2 billion.

Bank of USA oversubscribed its initial wager in CCB in May 2009, reaping a pretax acquire of $7.3 billion, as give losses mounted amid the recession. Last year, the slope oversubscribed rights to acquire 1.79 1000000000 CCB shares to Temasek.

--With resource from Donal Griffin and Jewess Childs in New York, Stephanie Tong in Hong Kong and Anna Kitanaka in Tokyo. Editors: saint Eichenbaum, William Ahearn

To occurrence the reporters on this story: Dawn Kopecki in New royalty at dkopecki@bloomberg.net; Hugh Logos in New royalty at hson1@bloomberg.net

To occurrence the application answerable for this story: king Scheer at dscheer@bloomberg.net