May 6 Bond insurer Assured Guaranty Ltd
said it reached a settlement with UBS AG in a lawsuit
that accused the bank of falsely representing the quality of the
loans underlying $1.49 billion of mortgage-backed securities.
UBS will pay Assured $358 million in an initial cash
payment, the bond insurer said. The two companies have also
entered into loss-sharing agreement on future claims, which will
take effect from the third-quarter.
"UBS represents the third financial institution with which
we have reached a major settlement since 2011," Assured Chief
Executive Dominic Frederico in a statement.
Assured sued UBS in February 2012 after the bank declined to
repurchase hundreds of millions of dollars worth of mortgages.
The lawsuit, which claimed breach of contract, focused on
financial guaranty insurance Assured provided in 2006 and 2007
to three mortgage-backed securities transactions.
Assured has filed similar lawsuits against units of JPMorgan
Chase & Co, Credit Suisse and Flagstar Bancorp
Inc. It had earlier reached settlements with Bank of
America for $1.1 billion and Deutsche Bank
for $165.6 million, without filing lawsuits against them.
Assured's shares closed at $20.83 on the New York Stock
Exchange on Friday.