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Buyback Boosts Countrywide

A big debt offering will pay for the repurchase and other things.

Countrywide Financial's


stock surged close to 3% on news that it is planning a $4 billion private placement of debt that will partially fund share repurchases.

The Calabasas, Calif.-based mortgage lender said Wednesday evening that it plans to sell $2 billion worth of series A floating rate convertible senior debentures that are due to mature in 2037. It is also selling $2 billion worth of series B convertible debt, also due in 2037.

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Countrywide plans to use a portion of the proceeds to repurchase up to 23 million shares of its common stock. Based on Countrywide's current share price, it could amount to $953 million in stock buybacks.

It expects to use the remainder of the proceeds for "general corporate purposes," it said.

Shares of Countrywide rose $1.01 to $41.34.

The stock also had more than 54 million shares traded on Thursday -- almost five times the average amount.