Countrywide - details on Bank of America investment

Last night, Countrywide announced a $2 Billion dollar investment from Bank of America.

BofA invested $2 billion in the form of non-voting preferred stock yielding 7.25%. The preferred securities can be converted into common stock at a price of $18 per share. Shares resulting from conversion are subject to an 18 month trading restriction. If the full amount of preferred shares were converted, BofA would own about 16% of Countrywide.

Further details were available today from an SEC filing.

Cash dividends are payable quarterly and are cumulative. If dividend payments are not made for 6 quarters, BofA has the right to elect two directors to Countrywide's Board until dividends have been paid for two consecutive quarters.

Other customary terms included pre-emptive rights and anti-dilution adjustments on any future issuances of common or preferred stock. Upon conversion of their preferred stock, BofA would also receive payment of any cumulative and unpaid dividends. BofA is subject to standstill restrictions prohibiting them from acquiring additional ownership of Countrywide. Countrywide is required to offer BofA the right to match terms of any third party proposal regarding sale of the company.