Bank of America (BAC) raises billions of dollars through the sale of a significant stake in an overseas commercial bank as part of an effort to raise nearly $40bn in fresh capital needed under federal regulators' projections of a more severe recession. Booking at least $7bn through the deal barely touches the bottom line federal regulators said BofA needs to raise to be sufficiently capitalized in adverse economic circumstances. It does, however, put BofA on the path to shoring up capital reserves in the event that bad assets turn worse, portfolios sour and loan defaults soar, widening the bank's losses. Unnamed sources told Bloomberg the bank stands to make $7.3bn through the sale of a 5.8% stake in China Construction Bank. The stake held a total value of $8.5bn as of market-close Monday, sources told the Wall Street Journal, although significant stakes often sell at a discount. The transaction marks the largest sale of shares in a China-based lender by an overseas investor. The deal also has caused Wall Street firms to scramble for buyers among hedge funds and other institutions, the WSJ reported. Another source confirmed Singapore-based Temasek Holdings is in the running of potential buyers, although it considers the price too high and already owns 5.56% of the Chinese lender. Sources told Bloomberg, however, that the purchase had already completed with Hopu Investment Management joining Temasek in buying 13.5bn shares from BofA. Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.