Bank of America Corp., facing demands from institutional investors that it buy back billions of dollars in soured mortgages, said some bondholders will delay action as it conducts “constructive” talks.
“Certain investors” agreed to extend deadlines that were set by an Oct. 18 letter, the lender said in a statement today, without identifying them. Firms including Pacific Investment Management Co., BlackRock Inc. and the Federal Reserve Bank of New York had demanded the bank repurchase loans packaged into $47 billion of bonds by its Countrywide Financial Corp. unit, people familiar with the letter said at the time.
“The extension will go on as long as the parties are engaged in a constructive discussion,” said Jerry Dubrowski, a spokesman for the Charlotte, North Carolina-based bank. “As we have said all along, if there is a valid claim, we will act responsibly. If there is no defect, we will defend our interests and the interests of our shareholders.”
Chief Executive Officer Brian T. Moynihan said in November the bank would engage in “hand-to-hand combat” to fend off unwarranted buyback demands from Fannie Mae and Freddie Mac, as well as bond insurers and private investors who want to return loans. Pending putback claims rose to $12.9 billion by Sept. 30 from $7.7 billion at the end of 2009, the lender has said.
Parties to the Talks
MetLife Inc., the biggest U.S. life insurer, is also part of the investor group with BlackRock, the world’s largest money manager, and Pimco, which runs the biggest bond fund, people familiar with the matter said in October. They are represented by Gibbs & Bruns LLP.
The accord announced today was reached among the bank’s home-servicing unit, Gibbs & Bruns, and Bank of New York Mellon Corp., the debt’s trustee, according to Bank of America’s statement.
“The claims and defenses of all parties are preserved,” the company wrote in the statement.
The bank climbed 31 cents, or 2.5 percent, to $12.60 in extended trading at 5:32 p.m. in New York.
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