May 2, 2008 – 10:25 am

Bondholders of Countrywide who have been counting on Bank of America to redeem the debt have instead been issued some unsettling news:

Bank of America said it is evaluating alternatives for disposing of the remaining Countrywide debt, including the possibility of redeeming, assuming or guaranteeing some or all of this debt, or allowing it to remain outstanding as obligations of Countrywide, and not Bank of America.


“Bank of America has made no determination in this regard, and there is no assurance that any of such debt would be redeemed, assumed or guaranteed,” the company said in a filing with the Securities and Exchange Commission.


Read that as “take the best and leave the bondholder holding the bag”.¬† And with the spreads on the credit default swaps at 200 basis points

“I’d be quite concerned if I was a bondholder if the intent of Bank of America is as it reads in the filing,” said Gary Austin, founder of PDR Advisors LLC in Charlotte. PDR manages about $600 million and doesn’t hold Countrywide debt.

More than concerned; unsettled.


  1. 2 Responses to “Unsettling! Countrywide”

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