GOIH Capital Markets: CFC in play....Bank of America, $2.0 billion investment in CFC.

Just crossing the wires is the announcement that BAC is investing $2.0 billion in CFC. The investment, gives BAC the right to convert its investment of preferred stock into common stock at $18.00 per share. Given CFC market cap of $12 billion, BAC just purchased a 16.6% interest in CFC. Moreover any other buyer comes forth, BAC has at least $8.00 profit per share based on where CFC was trading in the aftermarket today.

Profit calculation for BAC:

$2,000,000,000/$18.00 per share= 111,111,111 shares x $8.00 per share profit=$1.0 billion profit.

We are willing to bet the $1.0 billion profit is BAC's portion of the $11.5 billion CFC borrowed last week in the emergency line of credit from the 40 banks. Expect to see other banks announcing investments in CFC.


Remember Buffet just invested in BAC. Probably just a cover for Buffet to invest in CFC.....two for the price of one. BAC up as well as CFC.


Four Major Banks Borrow From Fed Wednesday August 22, 6:22 pm ET By Adam Schreck, AP Business Writer.
Citi, JPMorgan Chase, Bank of America and Wachovia Say They Borrowed $500M Each From Fed

Article from Yahoo Finance:

NEW YORK (AP) -- Four major banks said Wednesday they each borrowed $500 million from the Federal Reserve's discount window, lending weight to the central bank's efforts to restore liquidity to tight markets.

In going public with the moves, Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp. and Wachovia Corp. each stressed they have "substantial liquidity" and the ability to borrow money elsewhere. The borrowings, at least in part, seemed meant to reassure investors' jitters about the credit crunch rattling Wall Street. In a joint statement, the latter three banks said they decided to borrow the money to demonstrate "the potential value of the Fed's primary credit facility" and encourage its use by other banks.

Not bad for one days work.


Good work if you can get it.

The only remaining question is who is buying CFC?

Prepared by GOIH Analytics, a unit of GOIH Capital Markets.

6.33 pm 08-22-07