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Countrywide's Bankruptcy Option

Per Bloomberg report, Countrywide bankrupty option is (probably has been) on the table for Bank of America. Whether BAC wanted to put a cap on the mortgage loss from Countrywide portfolio now, it is unlikely to file for Countrywide's bankruptcy until the contingent legal claims become claims that are probable and quantified (such as the $8.5 billion settlement with bond investors). Without either of these two elements, it would not be easy to to through bankruptcy proceeding without raising a lot of questions and paying a reputational risk premium. 

Nevertheless, this option as 'leaked' by the bank is good news because it does point to a probably cap on legal liabilities due to Countrywide's mortgage mess. Although the credit rating could be negatively impacted mechanically, one would suspect that the market would welcome better clarity on BAC's key issue.