Bloomberg today reports that in order for Countrywide Financial (NYSE:CFC) to continue its loan operations it has had to tap $11.5 billion of what it states is a $185 billion (CORRECTION: apparently at some point today it was reported that the $11.5 billion was Countrywide's ENTIRE credit line... so the $185 figure is false) in available credit lines.To put the company’s current predicament into perspective a bit, for the month of July Countrywide reported that it had an average daily loan activity of $2.7 billion, so they have effectively bought themselves 4.25 days of operations at that level.
To be fair, this would assume that the company is completely stalled and that the $11.5 billion would be used to fund 100% of their daily loan production which is likely not the case.
In any event, it seems paltry to me and given that it was reported that they used 40 different banks for the sources of the funds, it’s quite possible the $11.5 billion was all they could get at the moment.
As the Bloomberg article points out… look for Countrywide to ask the Fed for a handout in the near future… although that relationship may possibly have been damaged by the company’s recent conversion to a savings and loan in order to get out from under the Federal Reserve’s regulation.
