Moody's affirms BofA ratings

Moody's Investors Service said it affirmed Bank of America Corp.'s senior ratings at A2 after the bank said it plans to raise additional capital to repay the $45 billion of preferred stock held by the U.S. government.

The outlook is stable.

The planned repayment of TARP reduces the bank's tier 1 capital position but enhances its common equity position, Moody's noted.

"Our current ratings for Bank of America reflect its strong franchise value, solid liquidity and improved capital position, balanced against our expectations that the bank will likely suffer from weak earnings and negative internal capital generation over the next year, as well as the risk to the bank's capital position in the event of a more severe economic downturn," David Fanger, a Moody's senior vice president, said in a statement.

"The ratings also reflect the challenges BAC faces with the ongoing integration of Merrill Lynch, the need for BAC to enhance its risk management capabilities and the uncertainty regarding any potential changes that may result from the appointment of a new chief executive officer," Fanger added.

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