Countrywide Financial: Bank of America's Deal Of The Century

Banking, finance, and taxes

Published: August 22, 2007 6:21 pm

It is too good to be true. Bank of America (BAC) put $ 2 billion into Countrywide Financial (CFC) by taking convertible preferred with an $18 a share strike price and a 7.25% coupon.

BAC was able to do this on a day when CFC closed a bit over $21 and then the mortgage bank’s shares moved up another 22% after hours. No details of the agreement were filed with the SEC at the time of this writing. It will be interesting to see exactly what rights the preferred shares have.

How much risk for BAC? Very little. The bank should have been able to handle due diligence without Herculean effort because it knows the industry as well as any other large financial institution in the US.

Nice work if you can find it.

Douglas A. McIntyre

The Average American Is Losing Momentum On Their Savings Every Day (Sponsor)

If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%¹ today. Checking accounts are even worse.

But there is good news. To win qualified customers, some accounts are paying more than 7x the national average. That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn a $200 bonus and up to 7X the national average with qualifying deposits. Terms apply. Member, FDIC.

Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.

¹https://www.fdic.gov/national-rates-and-rate-caps