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* CCB shares offered at discount of up to 5.1 pct toTuesday's close
* BofA exit comes after lock-up on CCB stake expired lastmonth
* Sell-down marks end of ties with CCB that started in 2005
By Elzio Barreto and Denny Thomas
HONG KONG, Sept 3 (Reuters) - Bank of America Corp launched on Tuesday an up to $1.5 billion share offering inChina Construction Bank Corp (CCB), exiting aneight-year investment in China's second-biggest lender in a bidto shore up its own balance sheet.
The U.S. bank is offering 2 billion Hong Kong-traded sharesof CCB in a range of HK$5.63 to HK$5.81 each,according to a term sheet of the deal seen by Reuters. The priceis equivalent to a discount of up to 5.1 percent to Tuesday'sclose of HK$5.93.
The deal follows a massive cleanup in Bank of America'sbalance sheet in recent years, worth about $60 billion, from thesale of non-core investments as chief executive Brian Moynihantries to boost the bank's capital ratios. The sale also comesabout two years after the bank raised a combined $14.9 billionfrom selling shares in CCB to a group of investors that includedSingapore's Temasek Holdings.
Bank of America unveiled an initiative in 2011 aimed atsaving $8 billion a year. The Charlotte, North Carolina-basedbank joins a list of Western banks that have cut their ties withChinese financial firms in recent years.
Many of the investments by the U.S. and European banks weremade as the big Chinese lenders were preparing for their marketdebuts nearly a decade ago. While the relationships wereprofitable and helped Chinese lenders become some of the world'sbiggest banks, few products or strategic benefits emerged.
Bank of America's investment in CCB dates to 2005 when itpaid $3 billion for a 9.9 percent stake in the Chinese bankbefore its initial public offering.
At the time, then Bank of America chief executive KennethLewis said the partnership was designed to give the bankincreased access to roughly 1.3 billion Chinese consumers, whileCCB would benefit from Bank of America's U.S. retail bankingexperience.
The U.S. bank increased its holdings in following years to25.6 billion shares, before paring it down as it focused onbolstering its capital base. Bank of America launched Tuesday'ssale after a lock-up on its remaining stake expired last month.
The sale also comes at a time when bad loans at Chinesebanks are showing signs of a pick up as the economy loses steamafter several years of strong growth. As a result, severalChinese lenders are preparing to launch equity sales to bolstertheir capital base.
Earlier this year, Goldman Sachs sold out of itsseven-year investment from Industrial and Commercial Bank ofChina.
Some foreign banks continue to hold on to their investmentsin Chinese lenders. Among them are HSBC Plc, which ownsa 19.9 percent holding in China's Bank of Communications Co Ltd and Spain's BBVA's has a 15 percent stake in ChinaCitic Bank Corp Ltd.
CCB shares are down 4.7 percent since the beginning of theyear in Hong Kong, outperforming the 9 percent decline in thefinancial sub-index of the Hong Kong stock exchange in2013.
