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Bank of America gives Countrywide a boost
Associated Press
Published August 23, 2007
LOS ANGELES - Countrywide Financial Corp. said Wednesday that Bank of America Corp. has made an equity investment of $2-billion in the company, a deal that comes as the nation's largest mortgage lender tries to weather a credit crunch that has rocked Wall Street and the mortgage industry. The transaction was completed and funded Wednesday, Countrywide said. "Bank of America, with $1.5-trillion in assets, has the largest retail banking franchise in the U.S. and is one of the most respected companies in the world," said Angelo R. Mozilo, Countrywide's chairman and chief executive. Under the terms of the deal, Bank of America, based in Charlotte, N.C., acquired $2-billion in the form of nonvoting, convertible preferred stock yielding 7.25 percent annually, Countrywide said. The shares can be converted into common shares of Countrywide at $18 per share, with certain restrictions. Countrywide shares jumped more than 20 percent, to $26.25, in after-hours trading. Before Countrywide's announcement, the shares had closed in the regular session up 3 cents, at $21.82. Shares of Bank of America, which rose 35 cents in regular trading Wednesday to $51.65, gained another 1.8 percent to $52.60 in after-hours trading.
[Last modified August 23, 2007, 00:47:50]
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