Countrywide Placed on Watch Positive

The ratings of Countrywide Financial Corp. have been placed on Rating Watch Positive by Fitch Ratings following the announcement of Countrywide's proposed acquisition by Bank of America Corp., while BoA's ratings have been affirmed and left with a negative rating outlook. Fitch said the transaction poses "significant challenges" to BoA, while enabling it to "achieve a key strategic goal" in the longer term. "The most significant challenge will be resolving credit issues related to CFC's stressed mortgage lending operations," the rating agency said. "While CFC has ceased nonprime lending activities, it retains a large volume of subprime, alt-A and high-value loan-to-value home equity loans on its books." Fitch can be found online at http://www.fitchratings.com.