BofA Slides as Stockholders Ponder Dilution From Exchange Plan

Bank of America Corp., whose stock lost about half its value this year, led lenders lower in New York trading as the company’s plan to bolster its balance sheet renewed concern that shareholders may see their stakes diluted.

The bank said late yesterday it may exchange preferred securities for a total of $6 billion of common shares and debt, a plan that could cut interest and dividend costs and improve capital levels, according to the Charlotte, North Carolina-based lender. The firm may issue 400 million shares and $3 billion of senior notes, according to a regulatory filing, taking advantage of lower prices for the bank’s existing securities.