BANK OF AMERICA : selling $2.8 billion

HONG KONG (Reuters) - Top U.S. lender Bank of America , raising cash to weather a dismal market at home, is selling a $2.83 billion chunk of its holding in China Construction Bank at a 12 percent discount on Wednesday, according to a term sheet obtained by Reuters.

The U.S. lender was selling more than 5.62 billion shares, or nearly 13 percent of its holding in Construction Bank, at HK$3.92 apiece, in a placement that had been widely anticipated.

The stake represents about 2.5 percent of Construction Bank, and will leave Bank of America with a 16.6 percent holding in the Beijing-controlled lender once the sale is completed.

"The news has been expected but investors will still take it hard because BoA will most definitely sell more. They need the money," said Francis Lun, general manager with Fulbright Securities in Hong Kong.

Bank of America bought its initial position in China Construction Bank ahead of the mainland lender's 2005 initial public offering and built its holding up to just over 19 percent.

Speculation that the U.S. bank would look to trim its stake has been rife since a three-year lock-up on the initial chunk of expired.

Bank of America's newly acquired Merrill Lynch arm, as well as UBS , were handling the share sale.

Construction Bank shares fell about 2.5 percent to HK$4.34 in early trading. ICBC shares were down about 4 percent.

($1=HK$7.8)

(Reporting by Umesh Desai, Tony Munroe and Parvathy Ullatil, Editing by Nick Macfie)