Countrywide Seeks More Capital - NY Post

U.S. mortgage lender Countrywide Financial is working to attract another investment similar to Bank of America's $2 billion preferred stock purchase last month, the New York Post reported Tuesday. Potential investors are unknown, but the Post's sources say JP Morgan, Citigroup, and a couple hedge funds have shown interest. "Countrywide is in desperate need of cash right now to continue funding mortgages and the credit markets are still largely closed to them," said a source, who is familiar with Countrywide. The deal could be done by the end of the month, and Goldman and Wachtell Lipton are helping to structure the deal, it said. In a research note, Standard & Poors said it believes the report "makes sense, based on our view that CFC will likely need additional funding while it works to pare down loans, lower expenses and switch origination to its thrift operation." Countrywide stock dropped on the news; shares are down 3.4% to $16.62 in midday trading, trading through its four-year low. The stock is down about 60% this year.

Sources: New York Post, Bloomberg, Reuters
Commentary: Countrywide Financial: Old vs. New Foreclosure Methods • Countrywide Takes Steps to Survive Credit Crunch
Stocks/ETFs to watch: CFC, JPM, C. Competitors: NDE, WFC. ETFs: PGF, IYF
Earnings call transcript: Countrywide Financial Q2 2007

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