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In the News

BoA sells entire stake in China Construction Bank

HONG KONG--Bank of America Corp. BAC -1.16% is selling its entire stake in China Construction Bank Corp. Tuesday for up to US$1.5 billion, exiting an investment it made in China's second biggest bank eight years ago, according to a term sheet seen by The Wall Street Journal Tuesday.

Bank of America will no longer have a stake in CCB once the sale is complete, according to the document.

The U.S. lender is selling 2 billion Hong Kong-listed shares in range of HK$5.63 to HK$5.81 each (73 U.S. cents-75 U.S. cents), representing a 2.0%-5.1% discount to Tuesday's closing price of HK$5.93.

Bank of America Merrill Lynch is the sole book-runner of the deal, the document said.

The stake sale comes after the Chinese lender reported a 13% rise in its first-half net profit, which was driven by higher interest income and commissions. Market experts remain wary about Chinese banks' asset quality after the huge credit boom aimed to stimulate the country's economy in last few years, although CCB said its nonperforming-loan ratio stayed at 0.99%.

Bank of America initially paid $3 billion for a 10% stake in CCB before the Chinese lender's Hong Kong listing in 2005. The U.S. bank sold most of the stake in August and November 2011 to improve capital and shed assets unrelated to traditional banking. It owned about a 1% stake in the Chinese lender before today's sale, which it is free to sell in 2013.

Source: http://online.wsj.com/article/SB10001424127887324432404579052401692576092.html

Cleary leads as Bank of America sells $1.5bn China Construction Bank stake

Cleary Gottlieb Steen & Hamilton has acted alongside Hong Kong's Deacons on Bank of America's sale of its remaining stake in China Construction Bank (CCB).

The US bank is exiting from its Chinese investment by selling approximately two billion shares, the equivalent of 1% of the company's stock, estimated to be worth around $1.5bn (£963m).

US firm Cleary acted as international counsel on the deal, with New York corporate partner Paul Shim leading a team alongside capital markets partner Leslie Silverman.

Deacons advised on local law, with Hong Kong corporate and capital markets partner Rhoda Yung heading up the firm's team.
In-house counsel at Bank of America working on the transaction, were led by US lawyer Joanne Tsung, alongside John O'Toole and Peter Siembab in Hong Kong. CCB was not directly involved in the sale.

Bank of America first invested in CCB in 2005, when it acquired a 9% stake from China SAFE Investments (Huijin) for $3bn (£1.9bn) ahead of the Chinese bank's initial public offering.

At the time, Kenneth Lewis, Bank of America chairman and chief executive officer, said the investment was aimed at tapping China's 1.3 billion consumers and creating long-term benefits.

Bank of America is thought to have begun reducing its investment in CCB in 2009, and in 2011 sold approximately half its stake - 13.1 billion shares worth $8.3bn (£5.3bn) - to a group of undisclosed investors.

In May, Goldman Sachs also exited from the Chinese banking market, selling its seven-year investment in the Industrial and Commercial Bank of China for $1.1bn (£706m).



Edward Lehman雷曼法学博士
Managing Director 董事长

LEHMAN, LEE & XU China Lawyers

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