According the Wall Street Journal, the acquisition deal received immediate approval from regulators and provides a strong dose of security for Countrywide. New of the deal came on the heels of Lehman Brothers Holdings Inc.'s announcement that it was shutting down a a subprime-lending business and two days after another big lender, Capital One Financial Corp., closed its GreenPoint mortgage arm.
"Countrywide is a survivor," Angelo Mozilo, chief executive officer and co-founder of the Calabasas, Calif., company said in an interview late yesterday.
Though the deal doesn't give Countrywide automatic access to Bank of America's capital, it is likely to persuade investors that the company has a powerful ally ready to help in any crisis. And it removes a major source of uncertainty hanging over the nation's credit markets at a time when investor confidence has been shaky.
In after-hours trading yesterday, shares of Countrywide jumped $4.06, or nearly 19%, to $25.88.