BAC-WT - Bank of America Warrants

[BargainValueHunter]

H/T to Todd Sullivan:

 

http://www.housingwire.com/news/countrywide-loan-credit-performance-improving-without-siginficant-modifications

 

The credit performance on Countrywide loans serviced by Bank of America ($7.74 0.02%) is improving at a rate faster than loans serviced by other large mortgage servicers — without a significant use of loan modifications.

 

The Countrywide loans serviced by BofA represent 15% of all outstanding nonagency loans. Combined with the other loans it services, BofA is the largest servicer in the asset class, according to Barclays Capital. More than half of these BofA-serviced nonagency loans are in Countrywide trusts. BofA acquired Countrywide in 2008.

 

Barclays Capital found that always current-to-delinquent roll rates on Countrywide subprime loans were cut by half to 1.1% in June from 2.2% in June 2010. The rate of improvement is better than loans serviced by Wells Fargo ($33.83 0.01%), JPMorgan Chase ($36.97 0.05%), Citigroup ($28.90 0.04%), or GMAC.

[wescobrk]

"Problem is the stress tests.  Because they can get approval for buybacks only once a year, they will not get approval till early January.  If the market perceives that they will get approval, and there is no reason to believe they will not at this time, then the stock will move up before they can buy at such cheap prices.  If it wasn't for the stress test approvals, they could already be buying stock based on how solid the balance sheet is now."

 

Sanjeev, why are you claiming approval for early Jan? Is it a different schedule in 2013?

Last year there wasn't an approval until March. The deadline to submit is early January. That was the schedule last year and I'm pretty sure that is the same schedule for 2013.

[Parsad]

Sorry Wesco, I was just generalizing about the timeline.  Cheers!

[PlanMaestro]

Swiss private bank Julius Baer  said on Monday it will acquire Bank of America  Merrill Lynch's private bank outside the U.S. for 1.47 billion Swiss francs ($1.5 billion), bumping up its assets by 40 percent.

[hardincap]

Swiss private bank Julius Baer  said on Monday it will acquire Bank of America  Merrill Lynch's private bank outside the U.S. for 1.47 billion Swiss francs ($1.5 billion), bumping up its assets by 40 percent.

 

??

from WSJ: The Zurich-based bank said it will pay 860 million Swiss francs ($880 million) in cash and shares to Bank of America. 

 

Where are you getting 1.5B?

[obtuse_investor]

Here are the relevant press releases:

• 
  Julius Baer to acquire Merrill Lynch’s International Wealth Management business outside the United States from Bank of America, with strong focus on growth markets http://www.juliusbaer.com/htm/672/en/Julius-Baer-to-acquire-Merrill-Lynch%E2%80%99s-International-Wealth-Management-business-outside-the-United-States-from-Bank-of-America-with-strong-focus-on-growth-markets.htm?Article=51707&ArticleReturn=302
  
• International Wealth Management Businesses Outside the United States to Be Sold to Julius Baer Group http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=1724972&highlight=#fbid=0Ux7nO_ttpH
  

 

By BAC's own admission, in the bottom of their press release: "The transaction will have an immaterial impact on Bank of America's balance sheet, financial results and capital ratios."

[MrB]

Swiss private bank Julius Baer  said on Monday it will acquire Bank of America  Merrill Lynch's private bank outside the U.S. for 1.47 billion Swiss francs ($1.5 billion), bumping up its assets by 40 percent.

 

??

from WSJ: The Zurich-based bank said it will pay 860 million Swiss francs ($880 million) in cash and shares to Bank of America. 

 

Where are you getting 1.5B?

 

http://www.bloomberg.com/news/2012-08-10/julius-baer-said-near-deal-to-buy-merrill-non-u-s-wealth-units.html

Julius Baer Group Ltd., the Swiss money manager established in 1890, agreed to pay about 860 million Swiss francs ($880 million) for Bank of America Corp. (BAC)’s Merrill Lynch wealth management business outside the U.S.

The cost of the transaction totals 1.47 billion francs, including 312 million francs of after-tax integration costs and incentives to retain Merrill bankers and 300 million francs to maintain regulatory capital, Zurich-based Julius Baer said today. Julius Baer shares fell the most in three months.

[xazp]

Only BAC and a few other companies can sell off a subsidiary for nearly a billion and say it's immaterial to our earnings, balance sheet, and financial results. 

 

Though I'm a bit confused by them taking shares in Julius Baer ... financial shares are worth nothing to their basel 3 capital.

 

 

Here are the relevant press releases:

• 
  Julius Baer to acquire Merrill Lynch’s International Wealth Management business outside the United States from Bank of America, with strong focus on growth markets http://www.juliusbaer.com/htm/672/en/Julius-Baer-to-acquire-Merrill-Lynch%E2%80%99s-International-Wealth-Management-business-outside-the-United-States-from-Bank-of-America-with-strong-focus-on-growth-markets.htm?Article=51707&ArticleReturn=302
  
• International Wealth Management Businesses Outside the United States to Be Sold to Julius Baer Group http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=1724972&highlight=#fbid=0Ux7nO_ttpH
  

 

By BAC's own admission, in the bottom of their press release: "The transaction will have an immaterial impact on Bank of America's balance sheet, financial results and capital ratios."

[Parsad]

Only BAC and a few other companies can sell off a subsidiary for nearly a billion and say it's immaterial to our earnings, balance sheet, and financial results. 

 

Though I'm a bit confused by them taking shares in Julius Baer ... financial shares are worth nothing to their basel 3 capital.

 

 

Here are the relevant press releases:

• 
  Julius Baer to acquire Merrill Lynch’s International Wealth Management business outside the United States from Bank of America, with strong focus on growth markets http://www.juliusbaer.com/htm/672/en/Julius-Baer-to-acquire-Merrill-Lynch%E2%80%99s-International-Wealth-Management-business-outside-the-United-States-from-Bank-of-America-with-strong-focus-on-growth-markets.htm?Article=51707&ArticleReturn=302
  
• International Wealth Management Businesses Outside the United States to Be Sold to Julius Baer Group http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=1724972&highlight=#fbid=0Ux7nO_ttpH
  

 

By BAC's own admission, in the bottom of their press release: "The transaction will have an immaterial impact on Bank of America's balance sheet, financial results and capital ratios."

 

Aren't the shares preferred?  It won't help their capital ratios, but they aren't common. 

 

Also, while the $880M is immaterial to $200B, it does take $72B off their asset side.  Shrink, shrink and get efficient.  Cheers!

[mankap]

It will improve the capital ratio by 0.6%.BAC is building fortress balance sheet.

[wescobrk]

I just watched a 3 minute video (FT web site). This gentleman argued it was lowering the ROE of BAC and they (BAC) got a nifty price.

 

I'm optimistic but not as much as Sanjeev.

 

I'll weigh in and say 90% of tbv after fed approval in March. That's about 12.50 a share. Still a great return!

 

I dont think it"ll hit tbv because the market still looks at earnings and it'll be difficult to earn much more than a buck a share in 2013 (which is about 11 billion), not a small number. The fed wont allow them to spend probably more than 15-20% on buybacks.

[Arden]

Why are you trying to guess a stock price in a few months' time? How can you do this and still proclaim your "edge" is your long term view?  This reminds me of the ridiculous "BAC cheering thread". We are all human, and susceptible to herding effect. Thing like this will make you blind to negative aspects of the investment.

 

The best way to think about an investment is perhaps not in a dark room alone, but surely it isn't creating a cult around s stock.

[nkp007]

Why are you trying to guess a stock price in a few months' time? How can you do this and still proclaim your "edge" is your long term view?  This reminds me of the ridiculous "BAC cheering thread". We are all human, and susceptible to herding effect. Thing like this will make you blind to negative aspects of the investment.

 

The best way to think about an investment is perhaps not in a dark room alone, but surely it isn't creating a cult around s stock.

 

All he's doing is trying to forecast the downside, and in this case there's more visibility in the short-term because of how government-approved buybacks work, BAC's cash position, and tangible book value.

 

I think we're all generally aware that BAC can still fail. However, that chance is much smaller than it was a year ago.

[redskin]

Only BAC and a few other companies can sell off a subsidiary for nearly a billion and say it's immaterial to our earnings, balance sheet, and financial results. 

 

Though I'm a bit confused by them taking shares in Julius Baer ... financial shares are worth nothing to their basel 3 capital.

 

 

Here are the relevant press releases:

• 
  Julius Baer to acquire Merrill Lynch’s International Wealth Management business outside the United States from Bank of America, with strong focus on growth markets http://www.juliusbaer.com/htm/672/en/Julius-Baer-to-acquire-Merrill-Lynch%E2%80%99s-International-Wealth-Management-business-outside-the-United-States-from-Bank-of-America-with-strong-focus-on-growth-markets.htm?Article=51707&ArticleReturn=302
  
• International Wealth Management Businesses Outside the United States to Be Sold to Julius Baer Group http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-newsArticle&ID=1724972&highlight=#fbid=0Ux7nO_ttpH
  

 

By BAC's own admission, in the bottom of their press release: "The transaction will have an immaterial impact on Bank of America's balance sheet, financial results and capital ratios."

 

Aren't the shares preferred?  It won't help their capital ratios, but they aren't common. 

 

Also, while the $880M is immaterial to $200B, it does take $72B off their asset side.  Shrink, shrink and get efficient.  Cheers!

 

I don't think the deal takes $72 billion of assets off BAC's balance sheet.  I think those are client's assets, not BAC's.

[ERICOPOLY]

Why are you trying to guess a stock price in a few months' time? How can you do this and still proclaim your "edge" is your long term view?  This reminds me of the ridiculous "BAC cheering thread". We are all human, and susceptible to herding effect. Thing like this will make you blind to negative aspects of the investment.

 

The best way to think about an investment is perhaps not in a dark room alone, but surely it isn't creating a cult around s stock.

 

Hal2000 has spoken.  You've got the wrong handle.

[Arden]

Burn! you should open a cheering thread about this too.

 

http://weknowmemes.com/wp-content/uploads/2012/03/kelso-burn.jpg

[Green King]

please explain the reference

[value-is-what-you-get]

FWIW - I found the BAC Cheering thread very informative with respect to options strategies for tax minimization, some good gambling vs investing arguments and how strategies for entering and exiting positions have far more to do with individual motivations than "target" prices.  And of course there was a bit of fun in there as well - lots of paper profits generates a celebratory mood!  "Ridiculous" didn't come to mind, although I can see how it may if the book were judged by it's cover.

[ERICOPOLY]

The very name of the thread ought to have been a tipoff.

 

However an emotionless person likely wouldn't have understood the nuance.

 

Lighten up!  Enjoy the journey, investing isn't a destination.

[ERICOPOLY]

It is okay to feel depressed when your portfolio is down 50%.  I do.

It is okay to feel euphoric when your portfolio is up 50%.  I do.

 

It is important to invest rationally despite these emotions.  That is what i try to do.

 

Not okay -- insulting others, acting condescendingly.  I've done it, but I'm not proud of it.

[ERICOPOLY]

It's always possible that Arden doesn't view his diatribe as condescending.

[Uccmal]

Gee, I was going to start an AIG cheering thread....

 

but the last one didn't end well.... lol

 

Eric  et al will recall the thread on the old board when Sanj went to lunch and we made a collective fortune on FFH options. 

[Parsad]

Gee, I was going to start an AIG cheering thread....

 

but the last one didn't end well.... lol

 

Eric  et al will recall the thread on the old board when Sanj went to lunch and we made a collective fortune on FFH options.

 

I wasn't out to lunch today or anything.  Just had a mocha at the Hotel Georgia with Alnesh about half an hour ago...did the stock move?  ;D 

 

Incidentally, as some of you may remember those days with Fairfax...the same people cheering are still the same people holding the stock today.  And I would have held my Steak'n Shake too...if some fool didn't go and decide he wanted to change the name of the company and his compensation, simply because his ego was just too damn big for his own britches. 

 

We own a ton of BAC...I plan on holding it for the next 10 years!  Cheers!

[meiroy]

It is okay to feel depressed when your portfolio is down 50%.  I do.

It is okay to feel euphoric when your portfolio is up 50%.  I do.

 

It is important to invest rationally despite these emotions.  That is what i try to do.

 

Not okay -- insulting others, acting condescendingly.  I've done it, but I'm not proud of it.

 

Ericopoly,

 

You wrote a post which I remember was quite delightful in its definition of life's happiness coming from making other people happy.  Do you remember in which thread it was?

 

[meiroy]

please explain the reference

 

http://www.urbandictionary.com/define.php?term=burn%21

 

2. BURN! 1 thumb up

An insult that is totally epic.Probably more epic to Michael Kelso.

"Dude I just saw Donna with Kasey" "OOOO burn!"