Banking, finance, and taxes
Countrywide Financial: Bank of America's Deal Of The Century
Published:
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
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
