just.a.guy

Will BofA Really Buy Countrywide?

kurt, I think that's what could be happening here. BAC has right-of-first-refusal on the assets as part of its $2BB convertible death-spiral financing last year.

I see the current deal on the table as just a call option for BAC, since it will have/has had a serious chilling effect on any other potential bidders.

Why would the deal just be a call option and not binding? Here, I assume that Countrywide's financial position will only continue to deteriorate, that the quality of its portfolio held-for-sale will only decline, and thus a Material Adverse Change to CFC is pretty much inevitable.

BAC will have front row seats, have done their diligence, and be in the driver's seat when this turns into a pre-packaged bankruptcy with BAC walking away with the servicing business.

Just a theory. Not one I believe in strong enough to hold onto my CFC puts, though. I sold those last month.