BoA investment in Countrywide calms market

Dealers believe the $2 billion investment by Bank of America in troubled California-based mortgage lender Countrywide Financial helped ease credit worries during yesterday’s trading in Europe.

“That’s the main reason why credit spreads moved significantly tighter,” says Marcus Schueler, London-based head of integrated credit marketing at Deutsche Bank.

By noon (BST) on Thursday, spreads on the five-year iTraxx Crossover Index of 50 sub-investment grade credit default swaps had narrowed to 309

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