MBIA Gains on Speculation of BofA Accord on Debt Protection
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MBIA Inc. shares surged after the bond insurer agreed with Bank of America Corp. to dismiss a lawsuit over protection against mortgage-debt defaults, prompting speculation that the two firms are near a wider settlement of claims tied to soured subprime home loans.
The suit is among several between Bank of America, the firm that bought Countrywide Financial Corp. in 2008 and Merrill Lynch & Co. in 2009, and MBIA, which guaranteed Wall Street’s toxic mortgage debt. The companies agreed to voluntarily dismiss the case, not bring it again and pay their own legal fees, according to a filing yesterday in New York state court.