Bank of America

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Bank of America Corp., the nation's second-largest bank, said "significant dislocations'' in the debt securities market will ``adversely impact'' fourth-quarter results.

The bank had $9.8 billion in collateralized debt obligations, mainly backed by subprime residential mortgages, the Charlotte, North Carolina-based company said in a regulatory filing today.

Bank of America's overall holdings of CDOs, pools of fixed- income securities, on Sept. 30 included a net $12.8 billion in which the bank is obligated to provide funding. Additionally, the bank said it was holding $2.4 billion worth of CDOs in its trading unit, including $1.9 billion backed by subprime mortgages, which were made to borrowers with the poorest credit.

"The question is whether BofA can actually sell these CDOs on the open market,'' said Bart Narter, senior analyst in San Francisco at the Celent consulting firm. ``This sounds like relatively good, senior positions, but the market is so discombobulated, it could still come back to bite them.''.......
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Bank of America announced that dislocations in the market for collateralized-debt obligations, or CDOs, will knock earnings for the fourth quarter......
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....J.P. Morgan said that some of its subprime-related positions could be hit by turbulent conditions in credit markets in the fourth quarter.....
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Bank of America Corp., the nation's second-largest bank, may need to write down $3 billion in debt securities in the fourth quarter that have lost value because of defaults on subprime mortgages. Shares gained the most in almost five years on investor sentiment that the worst may be over....
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Dec. 10 (Bloomberg) -- Bank of America Corp., the second- largest U.S. bank, will liquidate a $12 billion enhanced cash fund after losses on holdings that included debt sold by structured investment vehicles, or SIVs.......
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......Enhanced cash funds are sold to wealthy individuals and institutions as an alternative to money-market funds. Some hold mortgage-backed securities or mortgage-related debt issued by SIVs that have fallen in value as delinquencies on home loans rose to the highest in 20 years in the third quarter, according to data compiled by the Mortgage Bankers Association in Washington.
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"This could be the death of enhanced cash funds,'' said Peter Crane, founder of Crane Data LLC, the Westborough, Massachusetts-based publisher of the Money Fund Intelligence.....
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....The Bank of America fund had been the biggest of its kind before a big institution pulled its money, Crane said. Unlike money-market funds, which are considered the safest investments besides bank accounts and government debt, enhanced cash funds aren't required to maintain a $1 net asset value. To generate higher yields, enhanced funds buy riskier assets that money funds aren't permitted to hold.....
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