Countrywide Default Swaps Decline |
| Wall Street Journal - Aug 23, 2007 |
The cost of protecting Countrywide Financial Corp.'s debt fell sharply Thursday morning after Bank of America Corp. acquired a $2 billion equity stake in the nation's largest mortgage company.
The credit default swaps, which measure the perceived risk of owning a company's bonds, fell in price to $177,500 to insure $10 million of bonds annually for five years from $330,000 late Wednesday, according to Sid Bakst of Weiss, Peck & Greer. That brings the CDS back to levels last seen at the start of the month, before Countrywide ran into trouble accessing short-term funding.
The $2 billion investment from Bank of America is "something people are taking as certainly a positive sign," Mr. Bakst said. "I don't think it's everything we need to get us fully back on the road to recovery, but we're on that path. I don't know if it will take us all the way down that path," he added.
Read Full Article from Wall Street Journal
- Posted: 2007-08-23 09:56:13
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