TALKING POINT/BANKAMERICA <BAC> EQUITY OFFER
BankAmerica Corp is not under
pressure to act quickly on its proposed equity offering and
would do well to delay it because of the stock's recent poor
performance, banking analysts said.
    Some analysts said they have recommended BankAmerica delay
its up to one-billion-dlr equity offering, which has yet to be
approved by the Securities and Exchange Commission.
    BankAmerica stock fell this week, along with other banking
issues, on the news that Brazil has suspended interest payments
on a large portion of its foreign debt.
    The stock traded around 12, down 1/8, this afternoon,
after falling to 11-1/2 earlier this week on the news.
    Banking analysts said that with the immediate threat of the
First Interstate Bancorp <I> takeover bid gone, BankAmerica is
under no pressure to sell the securities into a market that
will be nervous on bank stocks in the near term.
    BankAmerica filed the offer on January 26. It was seen as
one of the major factors leading the First Interstate
withdrawing its takeover bid on February 9.
    A BankAmerica spokesman said SEC approval is taking longer
than expected and market conditions must now be re-evaluated.
    "The circumstances at the time will determine what we do,"
said Arthur Miller, BankAmerica's Vice President for Financial
Communications, when asked if BankAmerica would proceed with
the offer immediately after it receives SEC approval.
    "I'd put it off as long as they conceivably could," said
Lawrence Cohn, analyst with Merrill Lynch, Pierce, Fenner and
Smith.
    Cohn said the longer BankAmerica waits, the longer they
have to show the market an improved financial outlook.
    Although BankAmerica has yet to specify the types of
equities it would offer, most analysts believed a convertible
preferred stock would encompass at least part of it.
    Such an offering at a depressed stock price would mean a
lower conversion price and more dilution to BankAmerica stock
holders, noted Daniel Williams, analyst with Sutro Group.
    Several analysts said that while they believe the Brazilian
debt problem will continue to hang over the banking industry
through the quarter, the initial shock reaction is likely to
ease over the coming weeks.
    Nevertheless, BankAmerica, which holds about 2.70 billion
dlrs in Brazilian loans, stands to lose 15-20 mln dlrs if the
interest rate is reduced on the debt, and as much as 200 mln
dlrs if Brazil pays no interest for a year, said Joseph
Arsenio, analyst with Birr, Wilson and Co.
    He noted, however, that any potential losses would not show
up in the current quarter.
    With other major banks standing to lose even more than
BankAmerica if Brazil fails to service its debt, the analysts
said they expect the debt will be restructured, similar to way
Mexico's debt was, minimizing losses to the creditor banks.
 Reuter
