As I commented a couple of weeks ago, CFC has “perceived value” so it’s not a good BK candidate, but rather a “re-cap at a lower price” candidate. This happened sooner than I would have expected (and at a higher price than I would have expected). Nevertheless, essentially this is a quasi-recap of CFC. Will it be enough? Don’t know. My gut says no. But it has put a higher floor on CFC’s potential price decline, even if it’s only a couple of bucks.
My understanding is that BofA put in the lion’s share of the $11.5 billion debt rescue. So, it’s interesting that it’s now pumping in another $2 billion in converts.
This is the danger with large depositories, however. Someone always seems to want to acquire or recap them, seemingly no matter how screwed up they seem. It’s an unusual situation, but CFC’s stock is dangerous for both longs and shorts.
