Friday, October 15, 2010

Bank of America Downgraded By Bond Market on Foreclosures: Credit Markets - Bloomberg


‘Political Implications’

The cost to protect Bank of America’s debt for five years climbed for a fourth day, touching yesterday’s record of 205 basis points, according to Phoenix Partners Group. The difference between the swap price and the average of the five largest banks grew yesterday to 41.1 basis points, the most on record.

Citigroup’s swaps rose 3.2 basis points to 177 today and contracts on New York-based Morgan Stanley fell 2.2 basis points to 173, Phoenix data show. In February, Citigroup’s contracts were 94.4 basis points higher than those of Bank of America’s, according to CMA.

“For all of these residential real estate issues that are dominating the headlines today and have significant political implications in the 19 days going into the election, Bank of America sits there more exposed than Citigroup right now,” Nomura’s Havens said.

Implied Ratings

Prices on Bank of America’s credit-default swaps imply the debt is ranked Ba1 as of Oct. 13, five levels below its actual A2 grade, according to Moody’s Corp.’s capital markets research group. That’s the first time the firm’s swaps have signaled a junk ranking since May 6, the data show.

1 comment:

Successful Penny Stock Investing said...

Bank of america is not out of the woods yet. I have always regarded banks' insurance companies' financial services companies as phoney not real busineses. All they do is recycle money. I also have never invested in any financial services companies and never will. Just look at their record almost 2 out of every 3 savings and loans went out of business in the 1980's and just think about what happened a couple of years ago. Do I need to say anymore. Oh one other thing most If not all of the publicly traded subprime lenders are out of business today.