Need More Capital

Bank of America (NYSE: BAC) is liquidating businesses and streamlining as part of an overall restructuring effort, but also to get conform to new proposed capital requirements.  An increase of 1-2.5% of total capital could be required for balance sheets in an effort to help stabilize the global financial system, but may have the adverse affect.

This could have a huge impact on retail banks, investment banks, and the future of lending as we know it, both to consumers and the corporate world.  It appears as though they will be less likely to lend for deals that appear to not make as much financial sense as in the early 200s when almost every deal saw funding as the market continued to climb to its peak.

As other banks look to liquidate holdings and reduce current balance sheets, deals are going to be found in almost all areas of corporate finance, including Archstone Apartments, which was acquired by Bank of America and Barclays Plc (LSE: BARC.L) in 2007 from Lehman Brothers.  Toll Brothers Inc (NYSE: TOL) also recently announced another purchase of $71M in underperforming loans via its Gibraltar Capital and Asset Management.

One of the advantages here is for other organizations that still have strong balance sheets and are looking for good deals could find lots of potential here.  With banks like BofA looking for more strength and to remove non-core assets, we could new commercial real estate properties and loans looking to change hands in the upcoming months.