Key Developments: MBIA Inc (MBI.N)
Latest Key Developments (Source: Significant Developments)
Dow Jones reported that MBIA Inc agreed to pay $350 million to settle a legal dispute with Societe Generale SA (SCGLY, GLE.FR), ending the last of 18 bank lawsuits that have clouded the bond insurer's outlook since the early days of the financial crisis. The agreement will reduce by $4.2 billion the Armonk, N.Y., company's potential legal exposure on guarantees it wrote for certain commercial mortgage-backed securities, said a person familiar with the deal. The Company will draw almost half the funds, about $150 million worth, from its U.K. subsidiary and won't have to draw down its credit line with Bank of America Corp. (BAC), the person said. The settlement follows an agreement Monday by Bank of America to pay MBIA $1.7 billion to end the companies' dispute over similar CMBS guarantees. Full Article
Reuters reported that Bank of America Corp has agreed to pay $1.6 billion in cash to MBIA Inc and will receive the right to buy a 4.9% stake in the bond insurer to resolve long-running litigation, the companies said. Bank of America will also remit $137 million worth of MBIA senior debt it acquired in December and provide MBIA with a $500 million credit line as part of the deal. The accord will settle all of the two companies' disputes, including liability for MBIA as a counterparty in swap deals with Bank of America. Bank of America will take a charge against previously reported first-quarter earnings and its capital ratios will rise under Basel III as a result of the deal. Full Article
Bank of America Corp And Societe Generale SA Appeal Dismissal of Challenge To MBIA Inc's Restructuring-DJ
Dow Jones reported that Bank of America Corp and Societe Generale SA Thursday appealed a New York Supreme Court judge's dismissal of their challenge of MBIA Inc's restructuring, Bloomberg News reported on Friday. Justice Barbara Kapnick erred in her decision earlier this month to dismiss their challenge of the bond insurer's 2009 restructuring, the banks said, calling it 'arbitrary and capricious and an abuse of discretion'. Full Article
Reuters reported that Bank of America Corp has sued bond insurer MBIA Inc in a New York state court for allegedly interfering with the bank's offer to buy MBIA's bonds. Bank of America said it had purchased $136 million of senior notes in that tender and issued a default notice over the attempt to change terms. The bank claims in the lawsuit that the consent solicitation was the latest of MBIA’s premeditated and subversive actions since 2008 to benefit executives and stockholders to the detriment of Bank of America and other policyholders. In the lawsuit filed Bank of America alleged that MBIA illegally interfered with its tender offer and asked for the consent solicitation and amendment to be declared invalid. The bank also is seeking punitive and other damages. Full Article
Feb 13 - Bond insurer MBIA Inc is close to a $400 million settlement with Japan's Nomura Holdings Inc , reducing its legal exposure to soured mortgage-backed securities by $3 billion, the Wall Street Journal said.