Sept. 13 (Bloomberg) -- Countrywide Financial Corp., the biggest U.S. mortgage lender, rose by the most in more than seven years in New York trading after the company said it lined up $12 billion of financing.

The stock, which has lost more than half its value this year, climbed $2.31, or 14 percent, to $18.93 at 4 p.m. in composite trading on the New York Stock Exchange.

Countrywide last month borrowed $11.5 billion from bank credit lines to help weather a decline in investor demand for mortgages and reduced access to the commercial paper market, where the company usually borrows money. Bank of America Corp., the second-biggest U.S. bank, invested $2 billion in Calabasas, California-based Countrywide on Aug. 22.

The ability to find new sources of capital ``should substantially address funding concerns,'' a team of Credit Suisse Group analysts led by Moshe Orenbuch wrote in a research note today. They rate the stock ``outperform.''

Countrywide ``recently arranged for $12 billion in additional secured borrowing capacity through new or existing credit facilities,'' the lender said in a statement.

More than 100 mortgage companies have put themselves up for sale or gone out of business since the start of last year as rising subprime defaults hurt investor demand for home loans and made lenders reluctant to finance new mortgages.

``The company expects that it will be a long-term beneficiary of the current conditions and corrections in the mortgage industry,'' President David Sambol said in the statement.

Job Cuts

Countrywide said last week it would eliminate as many as 12,000 employees, or 20 percent of its workforce. Lending last month fell 17 percent to $34 billion and applications dropped 12 percent from August 2006, the company said in the statement. About $52 billion of applications were being processed as of Aug. 31, a 19 percent drop.

The fall in lending contrasts with a 2.6 percent increase in applications nationwide during August, according to the Mortgage Bankers Association.

The association's index of applications to buy a home or refinance a loan rose 5.5 percent last week. Some economists say the report overstates activity because the survey only includes retail lenders, which have probably seen an increase in business as many wholesale brokers closed their doors.

Bank of America bought $2 billon of Countrywide preferred shares last month, easing concern the mortgage company would file for bankruptcy. The Charlotte, North Carolina-based bank can convert the shares into common stock at $18 and has the right to match any offer for Countrywide.

Credit Swaps

Credit-default swaps for Countrywide fell 45 basis points today, the most in three weeks, to 280 basis points, according to Phoenix Partners Group LLC in New York. They traded as low as 265 basis points. A fall signals improving perceptions of credit quality.

A basis point on a credit-default swap contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.

``People are excited about the liquidity,'' Paul Miller, an analyst at Friedman Billings Ramsey & Co., said today. He rates the shares ``market perform.''

North Carolina Treasurer Richard Moore sent a letter to Countrywide today asking the company to explain its ``dubious loan practices,'' according to a statement. Moore runs the North Carolina Retirement Systems, which owns about $11 million of Countrywide stock.

To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.

Last Updated: September 13, 2007 16:17 EDT