Bloomberg reports that Bank of America is taking over the financially solvent part of Countrywide Financial (ie, the assets) but isn’t quite so committed to the liabilities. And how they’re going about this cozy little arrangement is fascinating:
“Whalen expects Bank of America to absorb the best assets, including Countrywide Bank, while the debt remains with a new company created by the merger, Red Oak Merger Corp. Red Oak may then file for bankruptcy, shielding Bank of America from liability, Whalen said.”
Man. Where is Andy Fastow when you need him?
Update
It is worth noting that Standard and Poor’s downgraded the Countrywide stock to junk today after initially saying it would raise the grade earlier this week.
I love this (not). B of A always amazes me. Here’s how it sounds to us normal folks: “I want to buy your company. But not all of it. Not the part that actually will COST me anything, I just want to buy the money making part. I don’t need your employees, I got my own. I don’t want all that messy debt stuff. We frown on debt around here. So, I’ll just take the assetts, buy the way CAN I GET THAT FN GIFT WRAPPED TOO?”
End of my sunday sermon.
Every time I turn around it seems like one of my non-BOA accounts becomes BOA. Now it looks like my mortgage will be next.
I’ve done MY part trying to keep Countrywide afloat. Oh well.