Quote:
Originally Posted by Kimmykim
BofA isn't in trouble...
|
Official Statement off the wires at 12:15am
*US TO PROVIDE $20B IN FRESH CAPITAL FOR FIRM; TO BACKSTOP $118B IN CO'S ASSETS
- US Treasury to buy $20B of BoA preferred stock with 8% dividend
- To protect BoA from potential losses on $118B of assets
- Firm to absorb up to $10B in losses, Treasury/FDIC will share the next $10B in losses; losses above $20B shared 90% govt, 10% BoA
- Then the Treasury and Fed will provide protection against larger losses; Fed to backstop losses with a non-recourse loan at a floating rate of OAS plus 300 bps/yr.
- FDIC will extend temporary liquidity guarantee maturities
- FDIC may extend loan-guarantee program for banks to 10 yrs.
- Guarantees cover assets with current value up to $37B, derivatives with max future loss of $81B
- As part of the agreement Bank of America will not be allowed to pay dividends above $0.01/share.
- Also, Bank of America has agreed to participate in a mortgage-modification program.
Yeah, you're right. Nothing to see here
