Sept. 1 (Bloomberg) -- Bank of America Corp. is offering to repay part of the $20 billion in U.S. government aid related to the bank’s acquisition of Merrill Lynch & Co., the Wall Street Journal said, citing unidentified people familiar with the plan.

Bank of America is also seeking to end a loss-sharing arrangement with the government on Merrill Lynch assets, the newspaper said. The Treasury Department and Federal Reserve have asked the lender to pay between $300 million and $500 million to end the arrangement, the Journal reported.

“It’s a sign the bank is moving beyond the crisis,” said Richard Staite, a London-based analyst at Atlantic Equities LLP who has an “overweight” rating on the bank’s shares. “This is positive news,” he said.

Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. have already repaid the government, removing them from restrictions on how they pay workers. According to the Journal, Bank of America isn’t offering to repay all the $45 billion it received under the Troubled Asset Relief Program.

A partial payment by the bank would mean it’s no longer considered an exceptional aid recipient, a status that attracts scrutiny from Congress and regulators, the newspaper said. The bank is considering the payment proposed by the Treasury and the Federal Reserve in relation to the Merrill Lynch assets, according to the Journal.

Government Guarantees

Scott Silvestri, a spokesman for Charlotte, North Carolina- based Bank of America, declined to immediately comment. A spokeswoman for the bank in London also declined to comment on the report.

The stock slipped to $17.56 as of 11:15 a.m. in German trading today from its $17.59 close in New York yesterday. The shares have climbed 25 percent this year, giving the lender a market value of about $152 billion.

In January, the U.S. government agreed to guarantee $118 billion of Bank of America’s assets to help the lender absorb Merrill Lynch and prevent the financial crisis from deepening. Under the agreement, Bank of America would absorb the first $10 billion of losses in the pool of assets, and the government would be liable for 90 percent of any additional losses.

Bank of America is also waiting for Kenneth Feinberg, U.S. President Barack Obama’s “special master” on executive pay, to approve the company’s 2009 pay package, the newspaper said. The compensation plan features so-called phantom stock units, which can’t be converted to shares for a defined period of time, the Journal said, citing people familiar with the matter.

To contact the reporters on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net; Jeran Wittenstein at jwittenstei1@bloomberg.net

Last Updated: September 1, 2009 05:21 EDT