by Calculated Risk on 8/22/2007 07:46:00 PM

From the WSJ: Bank of America Invests $2 Billion in Countrywide

Bank of America Corp. acquired a $2 billion equity stake in Countrywide Financial Corp., a move aimed at dispelling a crisis of confidence among creditors and investors in the nation's largest home-mortgage lender.

The move illustrates how amid the current shakeout among mortgage lenders, some financial heavyweights -- including Bank of America and Wells Fargo & Co. -- are gaining a firmer grip on the home-mortgage business even as smaller rivals with less-secure financing and capital bases fall by the wayside or are forced to retrench.
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Bank of America's investment involved Countrywide nonvoting convertible preferred stock yielding 7.25% annually. The preferred can be converted into common stock, subject to restrictions on trading for 18 months. A full conversion would give Bank of America a 16% to 17% stake in Countrywide's common shares...