October 26, 2016 / 3:36 PM / 3 years ago

Barclays, UBS settle with bondholders over Libor manipulation

A Barclays bank building is seen at Canary Wharf in London, Britain, October 19, 2016. REUTERS/Hannah McKay/File Photo

NEW YORK (Reuters) - Barclays Plc (BARC.L) and UBS AG (UBSG.S) have agreed to settle U.S. litigation by bondholders who accused the banks of conspiring with rivals to rig the Libor benchmark interest rate, lawyers for the plaintiffs said in court filings on Wednesday.

Terms were not disclosed, and both accords require the approval of U.S. District Judge Naomi Reice Buchwald in Manhattan.

Libor, or the London Interbank Offered Rate, is used to set rates on hundreds of trillions of dollars of transactions, including for credit cards, student loans and mortgages. It is calculated based on submissions by banks that sit on panels.

But a variety of investors accused Barclays, UBS and 14 other banks in private litigation of suppressing Libor before, during and after the 2008 financial crisis to boost earnings or make their balance sheets look healthier.

Wednesday’s accords cover a proposed class of investors who said the collusion caused them to receive artificially low returns on more than $500 billion of dollar-denominated debt whose interest payouts were linked to Libor.

Barclays spokesman Andrew Smith and UBS spokeswoman Erica Chase declined to comment. Lawyers for the plaintiffs did not immediately respond to requests for comment.

In June 2012, Barclays reached a $453 million settlement and entered a non-prosecution agreement with global regulators to resolve Libor manipulation charges.

UBS reached a similar $1.5 billion settlement six months later, and in May 2015 agreed to pay a $203 million criminal fine for breaching its own non-prosecution agreement.

The case is Gelboim et al v. Credit Suisse Group AG et al, U.S. District Court, Southern District of New York, No. 12-01025. The main Libor litigation is In re: Libor-Based Financial Instruments Antitrust Litigation in the same court, No. 11-md-02262.

Reporting by Jonathan Stempel in New York; Editing by Jeffrey Benkoe and Diane Craft

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