Hurry up BofA...
you need to save all your illegal-immigrant customers that got
home loans from Countrywide!
I pray that some MAJOR BofA shareholders will throw a LOUD fit
at the next shareholder meeting.
For the PERFIDIOUS work of BofA to give legitimacy to illegals via
offering of banking services.
Well, since B of A caters to illegals, and Countrywide does mostly B and C credit loans, it is no surprise that they are shackin up.
Bad credit loans are going belly up, and so are the companies who made their money off of them. Big deal.
Regular mortgage companies are just fine.
There’s nothing at all altruistic about BAC’s move here, IMHO.
They bought a ton of 7.25%-yielding preferred stock.
They probably shorted the bloody daylights out of CFC common as a hedge, and if they did so when CFC was 25 the other day, they already have a 15% 3-day return, was 20% earlier today w/CFC @ 20.high. This is a very common configuration for bondholders in a company. If the co. goes BK, the short bet pays off. Meanwhile, BAC collects 7.25% from CFC. Whatever happens to CFC, BAC will have an ongoing strangle (by that I mean, both a long and short position they can trade partially in and out of) and they get paid 7.25% to maintain. Not bad.
Should CFC go belly up, not only will BAC’s senior position in the preferred give them a serious equity foot in the door wrt a possible takeover, but the gain from shorting the common (which goes to zero in BK) pay for it.
I have no particular love for either company, but it’s a screaming brilliant move on the part of BAC.
Saw this interview yesterday on CNBC. BTW, my dealings with Bank of America last year was a nightmare.