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Monday, May 6
More on the BofA/MBIA settlement: As the settlement occurred prior to the filing of BofA's (BAC)...
More on the BofA/MBIA settlement: As the settlement occurred prior to the filing of BofA's (BAC) 10-Q, the bank will take a Q1 charge of $1.5B, or $0.10/share, bringing net income down from $0.20/share to $0.10. The Tier 1 Capital Ratio will increase 10 bps to 9.52%, reflecting the reduction in risk-weighted assets associated with terminated CDS contracts. Tangible book value drops $0.10/share to $13.36. In addition to cash of about $1.7B, BofA will provide a $500M credit line to MBIA Insurance. It will also receive warrants to purchase 9.94M shares of MBIA (MBI) stock - roughly a 4.9% stake - at an exercise price of $9.59/share anytime prior to May 2018. (PR)