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<p>August 16, 2007, 11:00 am </p>
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<p>Countrywide Bonds Offer Juicy Yield for the Hearty</p>
<p>Posted by Dana Cimilluca </p>
<p><a href="http://blogs.wsj.com/deals/2007/08/16/countrywide-bonds-offer-juicy-yield-for-the-hearty/"><u>http://blogs.wsj.com/deals/2007/08/16/countrywide-bonds-offer-juicy-yield-for-the-hearty/</u></a></p>
<p>The vultures are circling Countrywide.</p>
<p>Bonds of the nation’s largest home-mortgage lender are selling about as well as heaters in a desert early this morning. Some of the bonds that come due in the next 12 months were trading at prices that offered hearty investors a <em>25% to 35% yield</em>, one junk bond manager told us. </p>
<p>Countrywide stock, meanwhile, is down 15% at $18.20 after the company said before the market opened today that it would draw down on an $11.5 billion back up credit facility as the markets for all types of risky loans spiral downward. That brings the stock’s plunge since Jan. 3 to 58%. </p>
<p>Bond yields that juicy usually are reserved for companies at serious risk of going belly up. Countrywide, meanwhile, still has investment-grade ratings, even after at least two rating providers — Moody’s and Fitch — downgraded it today. </p>
<p>Citigroup said in a research note distributed this morning that recent weakness in the stock is "significantly overdone." The company’s second-quarter results last month, when it reported net income of $485 million, "in a challenging mortgage climate wasn’t too bad," Citi analyst Bradley Ball said. He noted that the company has $40 billion of funding available that could last it three to six months. Indeed, a longer-term Countrywide bond, its 5.8% notes maturing five years from now, yield just 9.60%, Reuters reports.</p>
<p>Not everyone, of course, is so sanguine. Other Wall Street firms such as Merrill Lynch are questioning Countrywide’s viability, as <a href="http://biz.yahoo.com/rb/070816/countrywide_liquidity.html?.v=8"><u>this Reuters story</u></a> today points out. </p>
<em>
<p>–</p>
With Serena Ng</em>
<p>So IHB is this a good deal? </p>
</strong>
<strong>
<p>Countrywide Bonds Offer Juicy Yield for the Hearty</p>
<p>Posted by Dana Cimilluca </p>
<p><a href="http://blogs.wsj.com/deals/2007/08/16/countrywide-bonds-offer-juicy-yield-for-the-hearty/"><u>http://blogs.wsj.com/deals/2007/08/16/countrywide-bonds-offer-juicy-yield-for-the-hearty/</u></a></p>
<p>The vultures are circling Countrywide.</p>
<p>Bonds of the nation’s largest home-mortgage lender are selling about as well as heaters in a desert early this morning. Some of the bonds that come due in the next 12 months were trading at prices that offered hearty investors a <em>25% to 35% yield</em>, one junk bond manager told us. </p>
<p>Countrywide stock, meanwhile, is down 15% at $18.20 after the company said before the market opened today that it would draw down on an $11.5 billion back up credit facility as the markets for all types of risky loans spiral downward. That brings the stock’s plunge since Jan. 3 to 58%. </p>
<p>Bond yields that juicy usually are reserved for companies at serious risk of going belly up. Countrywide, meanwhile, still has investment-grade ratings, even after at least two rating providers — Moody’s and Fitch — downgraded it today. </p>
<p>Citigroup said in a research note distributed this morning that recent weakness in the stock is "significantly overdone." The company’s second-quarter results last month, when it reported net income of $485 million, "in a challenging mortgage climate wasn’t too bad," Citi analyst Bradley Ball said. He noted that the company has $40 billion of funding available that could last it three to six months. Indeed, a longer-term Countrywide bond, its 5.8% notes maturing five years from now, yield just 9.60%, Reuters reports.</p>
<p>Not everyone, of course, is so sanguine. Other Wall Street firms such as Merrill Lynch are questioning Countrywide’s viability, as <a href="http://biz.yahoo.com/rb/070816/countrywide_liquidity.html?.v=8"><u>this Reuters story</u></a> today points out. </p>
<em>
<p>–</p>
With Serena Ng</em>
<p>So IHB is this a good deal? </p>
</strong>