BoA barred from converting Countrywide shares to common stock

August 2007

Bank of America (BoA) will not be able to convert its $2 billion investment in Countrywide Financial into common stock, it has been revealed.

The condition of the deal was revealed in a letter approving from the Office of the Comptroller of the Currency addressed to the BoA's general counsel Timothy J Mayopoulos.

The letter from OCC chief counsel Julie Williams, which was obtained by Dow Jones newswires, said: "Our conclusion is subject to the condition that [Bank of America] will not exercise the right granted to holders of the Securities to convert the Securities into common stock of (Countrywide) so long as the Securities are held by [Bank of America] or any subsidiary."

When the investment in Countrywide, the largest mortgage lender in the US, was revealed this week, the conditions of approval had not been widely reported.
The cash injection has been deemed a significant vote of confidence in Countrywide, shares of which opened up more than ten per cent before closing up around 0.92 per cent up.

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