Sovereign Bancorp (SOV) Up Following Presentation, Buyout Chatter

Sovereign Bancorp (NYSE: SOV) is higher today following a presentation at the Citigroup Financial Services Conference. The stock is also benefiting from takeover chatter going around Wall Street trading desks.

During the presentation, commenting on CDO exposure, the company said its CDO exposure consists 100% of synthetic credit default swaps referencing investment grade corporate debt, not sub-prime or ABS securities.

Sovereign also noted that residential mortgages make up 23% of their total loans. Direct home equity lending makes up 10% of total loans.

Banco Santander SA (NYSE: STD) owns a 25% stake in Sovereign and, according to report today from JPMorgan, Spain's largest bank may have to take a writedown of $1-$1.2 billion on the Sovereign investment.

Shares of Sovereign are up 7% today.

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