Correction: 'Wachovia's goodwill'
NEW YORK (Fortune) -- On Friday, Fortune published a story on CNNMoney.com about Wachovia Corp. (WB, Fortune 500) that made several assumptions about Wachovia's balance sheet to argue that the bank might need to raise further capital in the near future. Upon review, editors have discovered errors of fact and interpretation in the article ('Why Wachovia's goodwill is bad') that don't support that premise, specifically:
- Wachovia's option adjustable rate mortgages reset when the loan to house value ratio reaches 125%, not the 110-115% industry standard we applied. Therefore, Wachovia seems sufficiently protected under most market conditions.
- The bank's $5 billion CDO portfolio is hedged with credit default swaps. Of this, $2.2 billion is with two major global institutions, and not, as implied, with monoline insurers Ambac or MBIA. Wachovia's estimate of its total exposure of $400 million appears valid.
- The bank moved $4.1 billion in commercial real estate loans to their portfolio only after taking a charge on their income statement. It is not, as we believed, still fully exposed.
Fortune regrets the errors. 
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