CNBC's Maria Bartiromo's interview with Countrywide Bank CEO on the day (Aug23rd, 2007) Bank of America bought a piece of Country Wide allegedly as an investment. Country Wide owed, at that time, $60 billion to BofA. A few skeptics said the acquisition was to prevent a Country Wide default. BAC (BofA stock) was then $51.83. CFC (Countrywide) was $22 (down from $45.26) which is why Maria thought it was a steal.
This is my favorite part, money-honey Maria is trying to convince Angelo that he has given the store away to BofA.
Bartiromo: Let me ask you about the terms of the convert. This is talked bit today on Wall Street. It's already in the money. It's high coupon. Obviously this is a very attractive piece of paper for Bank of America.
Mozilo: It is.Bartiromo: The terms are not so great for you.Mozilo: I would disagree with that. I think terms are great. I think it's a win-win situation for us. Bank of America, world class firm.
In light of the subsequent acquisition of Merrill Lynch by BofA, the following is a bit ironic:
Bartiromo: People, the Merrill Lynch report last week coming out floating the word bankruptcy out there.
Mozilo: Right.
Bartiromo: What will determine whether this along with the $11.5 billion drawdown credit line, will in fact be enough?Bank of America Corp. (BAC), the largest U.S. lender, posted its worst two-day decline since 2009 after telling investors that claims from Fannie Mae and Freddie Mac may cost more than previously forecast. (Aug 5th, 2011)
Mozilo: Well, first of all let me comment couple things. One is the, just the irresponsible behavior on part of that analyst from Merrill Lynch to, yell fire in a very crowded theater in environment where you had panic already setting in the overall markets unrelated to Countrywide. Was totally irresponsible and baseless. And it, affected the lives of 61,000 people here at Countrywide our employees and more importantly or as important our deboss terse. Our deboss terse primarily senior citizens stood on-line frightened to death that countrywide would go bankrupt and lose their money. Has no basis whatsoever. Strong bank, well overcapitalized accessed to fed window.Bartiromo: He had a buy rating.Mozilo: Two weeks before had a buy, three weeks before had a buy rating on the stock goes from buy rating in two or three weeks to bankruptcy. Irresponsible.
Bank of America Announces 30,000 Layoffs (Sep 12th, 2011)
In case you are wondering, Mozilo kept most of the money.
This fine represents a small fraction of Mozilo's estimated net worth of $600 million. Countrywide will pay $20 million of the $67.5 million penalty because of an indemnification agreement that was part of Mozillo's employment contract. The terms of the settlement allow Mr. Mozilo to avoid acknowledging any wrongdoing.
In February 2011, the U.S. dropped its criminal investigation into the facts behind that civil settlement.Maria Bartiromo is also still considered an astute journalist.
