Countrywide falls 17.8 percent

NEW YORK (Reuters) - Shares of Countrywide Financial Corp CFC.N dropped more than 17 percent to $17.50 before the bell on Thursday on fears the largest U.S. mortgage lender could face bankruptcy as liquidity worsens.

In an update about its funding, the company said it had drawn on the entire $11.5 billion facility provided by a syndicate of 40 of the world's largest banks.

On Wednesday, a Merrill Lynch analyst cut the stock to "sell" from "buy," saying, "if enough financial pressure is placed on Countrywide or if the market loses confidence in its ability to function properly, then the model can break, leading to an effective insolvency."