Wells Fargo does $6 billion offering

Wells Fargo & Co. (WFC) today announced plans to sell $6 billion worth of common stock as it looks to shore up its balance sheet after the government stress tests.

J.P. Morgan Securities Inc. is acting with Wachovia Securities as joint bookrunning managers for the offering. Media reports indicate that San Francisco-based Wells Fargo needs to raise at least $15 billion. The offering may be a way for the bank to bolster its finances without submitting to government control. Private equity companies are expressing a growing interest in lending to cash-strapped banks.

Here is an estimate from Bloomberg News of the banks and the amount of capital they need: Bank of America Corp. (BAC), $34 billion, GMAC LLC, $11.5 billion, Citigroup Inc. (C), $5 billion, Morgan Stanley (MS), $1-2 billion. Goldman Sachs Group Inc. (GS), American Express Co. (AXP) and Bank of New York Mellon Corp. (BK) will not have to raise additional capital.

Some critics have complained that the stress tests are putting the banks through unrealistic scenarios. Banks have also griped about the conditions that come with the government help, prompting some companies to try and pay back their bailout money early.

"There is a real question as to the legitimacy of these results," said Jason O'Donnell, senior analyst at Boenning & Scattergood Inc., in an interview with the Associated Press.

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