8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (date of earliest event reported): August 22, 2007
COUNTRYWIDE FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)

Delaware	1-8422	13-2641992
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

4500 Park Granada, Calabasas, CA                                                                                                                                      91302

(Address of principal executive offices)                                                                                                                             (Zip Code)

                                     Registrant’s telephone number, including area code: (818) 225-3000

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

o      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01 Regulation FD Disclosure.

     On August 22, 2007, Countrywide Financial Corporation, a Delaware corporation (the “Company”), issued a press release announcing the execution of a convertible preferred stock purchase agreement (the “Investment Agreement”), dated August 22, 2007, by and between the Company and Bank of America, N.A., a national banking association (“Bank of America”), that provides for, among other things, the purchase by Bank of America of 20,000 shares of a new series of convertible preferred stock of the Company, 7.25% Series B Non-Voting Convertible Preferred Stock, par value $0.05 per share (the “Convertible Preferred Securities”), at an aggregate purchase price of $2,000,000,000. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.

     Under the terms of the Convertible Preferred Securities, set forth on the Certificate of Designations of 7.25% Series B Non-Voting Convertible Preferred Stock of Countrywide Financial Corporation (the “Certificate of Designations”), holders are entitled to cash dividends, payable quarterly, at the rate per annum of 7.25% of the Liquidation Preference per share of $100,000. The initial amount of dividends payable on each share of the preferred stock outstanding for each full dividend period will be $1,812.50.  Dividends are cumulative and if dividends are not paid for six quarters, holders of the preferred stock are entitled to designate two directors to the Company’s Board of Directors until dividends have been paid for two consecutive quarters.

     With respect to dividends and distributions upon the liquidation, winding-up or dissolution of the Company, the Convertible Preferred Securities rank in priority senior to the Company’s common stock and to each other class of capital stock or series of preferred stock (where the terms of the stock do not expressly provide that it ranks senior to or on parity with the preferred stock) and on parity with any additional Convertible Preferred Securities and any other class of capital stock or series of preferred stock. Convertible Preferred Securities each have a Conversion Price of $18.00, which may be adjusted upon the occurrence of certain events.

     The terms of the Convertible Preferred Securities also contain customary pre-emptive rights on any future issuances of the Company’s common stock or preferred stock and anti-dilution adjustments for below-market issuances of the Company’s common stock. Adjustments, however are not made upon the issuance of equity awards under the Company’s employee benefit plans (including the issuance of stock upon exercise of equity awards issued in the future) or any currently outstanding option, warrant, right or exercisable, exchangeable or convertible security.

     The Convertible Preferred Securities are convertible at the option of the holders, at any time or from time to time, into a number of shares of common stock equal to the Liquidation Preference of the Convertible Preferred Securities being converted, divided by the Conversion Price, plus cash in an amount equal to any accumulated and unpaid dividends on such securities.  Pursuant to the terms of the Investment Agreement, Bank of America may not transfer any of the shares of the Company's common stock received upon any conversion of the Convertible Preferred Securities for 18 months after conversion, with exceptions for affiliate transfers and third party merger or tender offer transactions.

     Furthermore, Bank of America is subject to customary standstill restrictions prohibiting it from, among other things, acquiring beneficial ownership of additional voting securities of the Company, making any proposal to acquire the Company or otherwise seeking to influence control of the Company, in each case other than ordinary course financial services business transactions not involving control of the Company. The Company is required to offer Bank of America the right to match the terms of any third party proposal entertained by the Company regarding a sale of the Company. These obligations continue until Bank of America no longer owns the Company’s common stock or the

Convertible Preferred Securities (on an as-converted basis) representing at least five percent of the Company’s common stock then outstanding.

     The Company and Bank of America also entered into a customary registration rights agreement with respect to the Convertible Preferred Securities and the common stock into which they may be converted.

     The foregoing descriptions of the Investment Agreement and the terms of the Convertible Preferred Securities do not purport to be complete and are qualified in their entirety by reference to the Investment Agreement and the Certificate of Designations, which will be filed by the Company with the Securities and Exchange Commission at a later date.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.
Exhibit No.	Description
99.1	Press Release dated August 22, 2007

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	COUNTRYWIDE FINANCIAL CORPORATION
	/s/ Susan E. Bow
Dated: August 23, 2007	Name:   Susan E. Bow
	Title:    Senior Managing Director,
	General Counsel & Secretary

Exhibit Index
Exhibit No.	Description
99.1	Press Release dated August 22, 2007

EX-99.1

Exhibit 99.1                          

Countrywide:

MEDIA CONTACT: (800) 796-8448
EMAIL: pressroom@countrywide.com
INVESTOR CONTACT: (818) 225-3550 David Bigelow or Lisa Riordan

Bank of America:

INVESTOR CONTACTS
Kevin Stitt: (704) 386.5667
Lee McEntire: (704) 388.6780
Leyla Pakzad: (704) 386.2024

MEDIA CONTACT:

Scott Silvestri: 1.704.604.8567
scott.silvestri@bankofamerica.com

COUNTRYWIDE RECEIVES $2 BILLION STRATEGIC EQUITY INVESTMENT FROM BANK OF AMERICA

CALABASAS, CA (August 22, 2007) – Countrywide Financial Corporation (NYSE: CFC), a diversified financial services provider and the leading mortgage lender and servicer in the U.S. announced today that it has received a $2 billion strategic equity investment from Bank of America (NYSE: BAC). The transaction was completed and funded today.

“Bank of America, with $1.5 trillion in assets, has the largest retail banking franchise in the U.S. and is one of the most respected companies in the world,” said Angelo R. Mozilo, chairman and chief executive officer of Countrywide. “Bank of America’s investment in Countrywide represents a vote of confidence and strengthens our balance sheet, enabling us to position Countrywide for future growth and success,” added Mr. Mozilo. “This transaction benefits all of Countrywide’s constituents, including investors, shareholders, mortgage customers, deposit holders, business partners and employees,” concluded Mr. Mozilo.

"We believe that in the current turmoil the stock market has been underestimating the value in Countrywide's operations and assets," said Kenneth D. Lewis, Bank of America chairman and chief executive officer. “This investment reflects our confidence in their business and recognizes the importance of the company in providing home financing across the country. We

Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550
http://www.countrywide.com

 

hope this investment will be a step toward a return to a more normal liquidity in the mortgage markets. Countrywide has a strong mortgage origination business and it services the mortgages of one in seven American households.”

Bank of America has invested $2 billion in the form of a non-voting convertible preferred security yielding 7.25 percent annually. The security can be converted into common stock at $18 per share, with resulting shares subject to restrictions on trading for 18 months after conversion.

The agreement between the parties is subject to customary standstill restrictions prohibiting the acquisition of beneficial ownership of additional voting securities of Countrywide.

Goldman Sachs & Co. acted as financial advisor to Countrywide and Wachtell, Lipton, Rosen & Katz served as legal advisor. Bank of America Securities acted as financial advisor to Bank of America, and Cleary, Gottlieb, Stern & Hamilton served as legal advisors.

About Countrywide

Founded in 1969, Countrywide Financial Corporation is a diversified financial services provider and a member of the S&P 500, Forbes 2000 and Fortune 500. Through its family of companies, Countrywide originates, purchases, securitizes, sells, and services prime and nonprime loans; provides loan closing services such as credit reports, appraisals and flood determinations; offers banking services which include depository and home loan products; conducts fixed income securities underwriting and trading activities; provides property, life and casualty insurance; and manages a captive mortgage reinsurance company. For more information about the Company, visit Countrywide's website at www.countrywide.com.

This Press Release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, regarding management's beliefs, estimates, projections, and assumptions with respect to, among other things, the Company's future operations, business plans and strategies, as well as industry and market conditions, all of which are subject to change. Actual results and operations for any future period may vary materially from those projected herein and from past results discussed herein. Factors which could cause actual results to differ materially from historical results or those anticipated include, but are not limited to: increased cost of debt; reduced access to corporate debt markets; unforeseen cash or capital requirements; a reduction in secondary mortgage market investor demand; increased credit losses due to downward trends in the economy and in the real estate market; increases in the delinque ncy rates of borrowers; competitive and general economic conditions in each of our business segments such as slower or negative home price appreciation; changes in general business, economic, market and political conditions in the United States and abroad from those expected; reduction in government support of homeownership; the level and volatility of interest rates; changes in interest rate paths; changes in debt ratings; changes in generally accepted accounting principles or in the legal, regulatory and legislative environments in which Countrywide operates; the judgments and assumptions made by management regarding accounting estimates and related matters; the ability of management to effectively implement the Company's strategies; and other risks noted in documents filed by the Company with the Securities and Exchange Commission from time to time. Words like "believe," "expect," "anticipate," "promise," "plan," and other expressions or words of similar meanings, as well as future or conditional verbs su ch as "will," "would," "should," "could," or "may" are generally intended to identify forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements or any other information contained herein.

SOURCE Countrywide Financial Corporation

Investor Contact: 1-818-225-3550, David Bigelow or Lisa Riordan, Media Contact: 1-800-796-8448

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     Investor Relations 
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550
http://www.countrywide.com

About Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving 57 million consumer and small business relationships with more than 5,700 retail banking offices, more than 17,000 ATMs and award-winning online banking with more than 22 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 175 countries and has relationships with 98 percent of the U.S. Fortune 500 companies and 80 percent of the Fortune Global 500. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange. www.bankofamerica.com

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     Investor Relations
4500 Park Granada · Calabasas, CA 91302 · 818-225-3550
http://www.countrywide.com