TBO.com - TBO is Tampa Bay Online

Business Briefs

ADVERTISEMENT

The Tampa Tribune

Published: May 3, 2008

NATION

Bank Unclear On Debt

Bank of America, which has announced plans to buy Countrywide Financial, said in a regulatory filing that there were no assurances that a big chunk of the distressed subprime mortgage lender's debt would be redeemed, assumed or guaranteed.

In a filing with the Securities and Exchange Commission on Thursday, Charlotte-based Bank of America said Countrywide had outstanding debt of about $97.2 billion as of Dec. 31.

The total included $11.48 billion in revolving credit facilities, "which Bank of America expects will be repaid upon closing of the merger." In addition, Countrywide has some $47.68 billion in advances from the Federal Home Loan Bank system, which Bank of America "expects will remain outstanding until repaid by Countrywide Bank." The bank is a division of Countrywide Financial, which is based in Calabasas, Calif.

What will happen to the balance of about $38 billion - including bonds and other debt instruments - appeared to be more problematic.

The filing said Bank of America "is currently evaluating alternatives for the disposition of the remaining Countrywide indebtedness, including the possibility of redeeming, assuming or guaranteeing some or all of the debt or allowing it to remain outstanding as obligations of Countrywide."

It added, "Bank of America has made no determination in this regard, and there is no assurance that any of such debt would be redeemed, assumed or guaranteed."

Equity Borrowing Down

Falling home prices and tighter lending standards are preventing more homeowners from pulling money out of their homes, Freddie Mac said Friday. In the first three months of the year, 56 percent of homeowners refinanced their mortgages and "cashed out" at least 5 percent of their equity. That's a four-year low, and down from the peak in mid-2006 of 88 percent, according to the McLean, Va.-based mortgage finance company.

From January through March, Freddie Mac says borrowers cashed out $29 billion in home equity, down more than 19 percent from $36 billion in the fourth quarter of 2007.

Murdoch Firm On Bid

Rupert Murdoch's News Corp., which had appeared close to a deal to buy Newsday, does not plan to raise its bid for the Long Island newspaper despite a higher offer from Cablevision Systems, which offered $650 million. That bested Murdoch's $580 million price, as well as an offer of equal value from New York Daily News owner Mortimer Zuckerman. It wasn't clear whether Zuckerman would respond to Cablevision's higher offer.

ENERGY

Gas Prices Drop

Retail gas prices fell slightly Friday - the first time in 18 days they have not risen to a new record - and analysts say pump prices may be peaking for the year. Meanwhile, oil futures for June delivery rose $3.80 to $116.32 in New York after Turkish airstrikes on Kurdish rebel bases in Iraq injected some supply concerns into the market

The national average price of a gallon of regular gas fell 0.1 cent overnight to $3.622. Diesel prices fell 0.2 cent to a national average of $4.249 a gallon.

A staff and wire report

Share this:

Loading Comments...

Email Print

ADVERTISEMENT