ourkid8 Posted December 30, 2015 Share Posted December 30, 2015 BAC is in the process of redeeming $2B in trust preferred securities related to its ML acquisition. They will also post a fourth quarter pretax non-cash write down of $600mm. Can someone help me understand why? When they redeemed other debt, there was no subsequent write down. http://www.thestreet.com/story/13409305/1/bank-of-america-bac-stock-lower-on-600-million-writedown.html?puc=yahoo&cm_ven=YAHOO Link to comment Share on other sites More sharing options...
LC Posted December 30, 2015 Share Posted December 30, 2015 not really sure but maybe they issued the securities below par with the promise to make whole upon redemption? so there was a 600M non-cash discount sitting on the books that is being reversed? Link to comment Share on other sites More sharing options...
JayGatsby Posted December 30, 2015 Share Posted December 30, 2015 Looks like the carrying value on their books of the securities must be $1.4B. So when they redeem the pref at the $2B face amount they're doing so at $600M more than carrying cost causing them to be marked up. Not sure that's what caused the stock to move. Can't think of why it shoul have an impact. Link to comment Share on other sites More sharing options...
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