Countrywide to tender for floating-rate convertibles due 2037

By Jennifer Chiou

New York, Oct. 10 - Countrywide Financial Corp. said it has agreed to start a tender offer for its $2 billion of series B floating-rate convertible senior debentures due 2037.

Law firm Brown Rudnick LLP announced that the Bank of New York Mellon, the trustee of the debentures, and Countrywide settled their ongoing litigation filed in the Delaware Chancery Court.

Under the settlement agreement, Countrywide will make a tender offer for the securities on or before Oct. 20 and the trustee will dismiss the pending lawsuit.

The company said it will pay $980 per $1,000 principal amount of debentures, plus accrued interest.

On July 31, Brown Rudnick, on behalf of the trustee, began litigation, alleging that Bank of America's recent acquisition of Countrywide was a change of control of Countrywide under the debenture indenture. In the trustee's complaint, the change of control was said to have triggered an obligation by Countrywide to repurchase all debentures at par at the option of holders.

Countrywide is a diversified financial services provider based in Calabasas, Calif.

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