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Bank of America Corporation Message Board

  • jlbhgb jlbhgb Jun 7, 2013 9:55 AM Flag

    SuPimco Defends $8.5 Billion BofA Mortgage Accord

    Bank of America Corp.’s $8.5 billion mortgage-bond settlement is “outstanding” for investors, said a Pacific Investment Management Co. executive, who defended the deal against opposition.
    The settlement was reached after an investor group that included Pimco and BlackRock Inc. (BLK) at first demanded $12 billion, eventually coming down to a “take or leave it” offer of $8.5 billion, Kent Smith, an executive vice president at Pimco who helped negotiate the agreement, testified yesterday.

    “It’s an outstanding deal, and it’s in the best interest of our clients to support it,” Smith said.
    Smith was the first witness to testify in a trial over the agreement, which is being considered by Justice Barbara Kapnick of New York State Supreme Court in Manhattan. The accord resolves claims from Countrywide Financial mortgage-bond investors over loans bundled into securities. American International Group Inc. (AIG) is fighting the settlement, saying Bank of America isn’t paying enough to compensate investors.
    Settlement negotiations took place during the first half of 2011 when the Pimco group fought with Bank of America representatives over the estimated size of Countrywide’s liability, Smith said. Investors at one point presented an analysis to Bank of America, and the bank’s chief risk officer, Terrence Laughlin, “threw it back across the table at us,” Smith testified.
    Suing Versus Settling

    See full article on bloomberg

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