Mortgage lender Countrywide Financial Corp. (CFC) Thursday said leading proxy advisory firm ISS/RiskMetrics Group recommended Countrywide's stockholders to vote for the proposed merger agreement with second largest bank in the US, Bank of America (BAC) at its special stockholder meeting on June 25, 2008.
In January 2008, Bank of America agreed to buy Countrywide Financial for about $4 billion in stock. As per the terms of the agreement, Bank of America would issue 0.1822 of its stock for each share of Countrywide.
The acquisition is expected to be neutral to Bank of America earnings per share in 2008 and accretive in 2009, excluding merger and restructuring costs.
The acquisition rescues the troubled mortgage lender and makes Bank of America the nation's largest mortgage lender and loan servicer. Bank of America would benefit from Countrywide's broader mortgage capabilities, including its extensive retail, wholesale and correspondent distribution networks.
Bank of America would also gain greater scale in originating and servicing mortgages in the US, where Countrywide had $408 billion in mortgage originations in 2007 and has a servicing portfolio of about $1.5 trillion with 9 million loans.
On June 5, 2008, Bank of America received approval from the Federal Reserve System to acquire Countrywide Financial.
Countrywide Financial's stock closed Thursday's regular trade at $4.79, up 21 cents or 4.59%.
Shares of Bank of America closed Thursday's regular trade at $29.44, up 59 cents or 2.05%. In the after hours trading, the stock further gained 10 cents or 0.34%.
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