NEW YORK (AP) - Credit ratings agency Fitch Ratings on Monday placed all of
Countrywide Financial Corp.'s ratings on an "evolving" watch.
The ratings were previously on a "positive" watch.
The change reflects uncertainty surrounding how Countrywide's current debt
will be treated once the acquisition of the nation's mortgage lender is
completed by Bank of America Corp. In a regulatory filing Thursday, Bank of
America left open the possibility that it would not cover outstanding debt when
Countrywide is acquired.
An evolving watch means the company could be upgraded or downgraded.
Countrywide currently carries a long-term issuer default rating of "BBB-," one
notch above junk status. Depending on the terms of the completed deal, its
rating could be raised to match Bank of America's at "AA." The rating would
likely be cut if deal is not completed, Fitch said in a statement.
Fitch expects the deal will be completed but is unsure of the final terms.
In January, Charlotte, N.C.-based Bank of America agreed to purchase
Calabasas, Calif.-based Countrywide for about $4 billion in stock. The deal is
expected to close during the third quarter.
Shares of Countrywide fell 70 cents, or 11.7 percent, to $5.28. Bank of
America shares fell 63 cents to $39.16.
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