This comes on the hells of this morning’s Bank of America Corporation (NYSE: BAC) announcement that it was offering a tender exchange offer on nine of its preferred series for up to 200 million shares of common stock. At today’s prices, that would represent more than $2.2 billion in new common stock. The largest US bank holding company issuers we have seen with Bank of America are JPMorgan Chase & Co. (NYSE: JPM), Wells Fargo & Co. (NYSE: WFC), and Goldman Sachs Group Inc. (NYSE: GS).
We have already seen some selective retirement of preferred stock from the likes of Citigroup, Inc. (NYSE: C), and that accomplished some of the same issues that Bank of America was trying to address.
All of these index levels actually track just the common stock, so the dilution, the new issuances, and the potentially larger market caps of the common shares would be what matters to these ETF’s. These ETF’s are only full of the common stocks.