BofA Agrees to Buy Countrywide for $4B

(Read more on the debt and equity markets.)

CALABASAS, CA-Bank of America has agreed to buy struggling home lender Countrywide Financial Corp. for $4 billion in an all-stock transaction, a deal that bails out the financially troubled home loan giant and makes Charlotte, NC-based BofA the country’s largest home mortgage originator. Bank of America’s statement this morning regarding the acquisition says that, “Origination of subprime loans is not planned for the combined company,” a reference to the subprime home mortgage collapse that ultimately sank Countrywide while sending financial shock waves throughout the commercial real estate financing world and the rest of the capital markets.

The deal also ends speculation that Countrywide might file for bankruptcy, but it leaves unanswered the question of what will happen to Angelo Mozilo, Countrywide’s CEO, who at one time was scheduled to retire but chose to stay on. Bank of America CEO Kenneth Lewis addressed that question this morning in a conference call with financial analysts, saying, “I would want [Mozilo] to stay until the deal gets done, and then I would guess that he would want to go and have some fun, but I will talk to him next week about his personal desires.”