Bank of America Corporation (BAC) Invests in Countrywide Financial Corp. (CFC)
Bank of America Corp. has invested $2 billion in Countrywide Financial Corp., the largest mortgage lender in the United States.
The investment comes in the form of a nonvoting convertible preferred security yielding 7.25 percent annually. The security can be converted into common stock at $18 per share.
"We believe that in the current turmoil the stock market has been underestimating the value in Countrywide's operations and assets," says Ken Lewis, BofA chairman and chief executive. "This investment reflects our confidence in their business and recognizes the importance of the company in providing home financing across the country."
Lewis says he hopes the investment will be a step toward a return to more normal liquidity in the mortgage markets.
California-based Countrywide (NYSE:CFC - News) services the mortgages of one in seven U.S. households, he says.
Charlotte-based BofA (NYSE:BAC - News) is one of the world's largest financial institutions, with more than 5,700 retail-banking offices and 17,000 ATMs.
Published August 22, 2007 by the Charlotte Business Journal
The investment comes in the form of a nonvoting convertible preferred security yielding 7.25 percent annually. The security can be converted into common stock at $18 per share.
"We believe that in the current turmoil the stock market has been underestimating the value in Countrywide's operations and assets," says Ken Lewis, BofA chairman and chief executive. "This investment reflects our confidence in their business and recognizes the importance of the company in providing home financing across the country."
Lewis says he hopes the investment will be a step toward a return to more normal liquidity in the mortgage markets.
California-based Countrywide (NYSE:CFC - News) services the mortgages of one in seven U.S. households, he says.
Charlotte-based BofA (NYSE:BAC - News) is one of the world's largest financial institutions, with more than 5,700 retail-banking offices and 17,000 ATMs.
Published August 22, 2007 by the Charlotte Business Journal
Labels: BAC, Bank of America Corp., CFC, Countrywide Financial Corp.
posted by Stock Administrator @ 10:33 PM
1 Comments:
At 12:30 AM ,
W.C. Varones said...
Bailout for Countrywide? Looks more like a free-money, riskless-arbitrage deal for BofA to me.
http://wcvarones.blogspot.com/2007/08/omens.html
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