BofA Assumes Countrywide Debt
Bank of America
(BAC) - Get Bank of America Corporation Report
is assuming the debt of Countrywide Financial, it said in a filing with the
Securities and Exchange Commission
on Monday.
As of Friday, Countrywide and its subsidiary Countrywide Home Loans transferred "substantially all" of their assets and operations to BofA. The Charlotte, N.C., bank also assumed roughly $16.6 billion of debt securities and guarantees, the filing said.
Earlier this year, BofA paid $4 billion for Countrywide, once the nation's largest independent mortgage lender, which got pummeled by the subprime mortgage meltdown. BofA completed its acquisition of Countrywide on July 1.
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Critics of the deal, announced in January, were concerned that BofA would not take on responsibility for Countywide's debt in light of the souring economy. The company had said this spring that it was mulling its options for Countrywide's debt, including "allowing it to remain outstanding as obligations of Countrywide (and not Bank of America)," according to a May SEC filing.
The disclosure caused Standard & Poor's to downgrade Countrywide's debt to junk status at the time.
BofA has since moved on to its next acquisition target.
Merrill Lynch
(MER)
agreed to sell itself for $44 billion in September and the deal is expected to be completed by the end of the year.
Shares of BofA were falling roughly 3.9% to $19.69 on Monday.
