Bank of America (NSYE:BAC) and Countrywide debt

Bank of America Corp (NYSE:BAC) who back in July acquired Countrywide Financial Corp agreed to assume $16.6 billion of debt and guarantees of the bank it said in Monday.

At the end of April this year Bank of America the North Carolina-based bank was looking at all options for the Countrywide debt, which is estimated at around $40 billion, However at the time there was no assurance it would guarantee, assume or redeem the debt.

This sparked fears that the corporate debt that the Bank of America did not take on would be exposed to defaults and high risks. America’s third largest bank has taken a step forward to relieve such concerns, stating that they are taking on the obligation to pay back any Countrywide Financial corporate debt holder.

Countrywide was the biggest mortgage lender in America before the Bank of America brought it on July 1 for $2.5 billion. In the third quarter Countywide added $259 million to Bank of America’s profits, although overall Bank of America share value is down 50 percent this year.

Source: reuters download xxx state of the union dvd