BAC Expects to Save $230M Per Quarter on Interest

[Parsad]

BAC is paying down $40B in long-term debt in the 2nd quarter, which will save them about $230M in interest costs every quarter.  I especially like the last line on risk control by CFO, Bruce Thompson:

 

"One of the most significant things you can do is just make sure you don't have any tree that's too tall - even if you think you've done hedging and everything else is right," he said.

 

http://finance.yahoo.com/news/bofa-expects-save-230-million-235418607.html;_ylt=AjIlbH9uoxKbPR2Nq413fNqiuYdG;_ylu=X3oDMTNyYjZuaDY2BG1pdANGUCBUb3AgU3RvcnkgTGVmdARwa2cDMjRiZTllNzEtYzljMC0zZGI5LWE3YjYtMWRlNGEyODNkZDE5BHBvcwMyBHNlYwN0b3Bfc3RvcnkEdmVyAzJjMjE2YWMwLWI0ZWEtMTFlMS1iY2IxLTRlYzcyNmJkOWVjZQ--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

 

Cheers!

[rranjan]

Due to short term interest rates being near zero and having so much deposits, most big banks are reducing their long term debt. In normal environment they used to roll over their long term debt but right now it seems they are better off by reducing their long term debt.

[PlanMaestro]

Indeed, swimming in liquidity. If officials do not let them charge for those deposits at least pay down expensive liabilities.