Assured says to be paid $358 million as it settles UBS suit
(Reuters) - Bond insurer Assured Guaranty Ltd (AGO.N: Quote) said it reached a settlement with UBS AG UBSN.VX in a lawsuit that accused the bank of falsely representing the quality of the loans underlying $1.49 billion of mortgage-backed securities.
UBS will pay Assured $358 million in an initial cash payment, the bond insurer said. The two companies have also entered into loss-sharing agreement on future claims, which will take effect from the third-quarter.
"UBS represents the third financial institution with which we have reached a major settlement since 2011," Assured Chief Executive Dominic Frederico in a statement.
Assured sued UBS in February 2012 after the bank declined to repurchase hundreds of millions of dollars worth of mortgages. The lawsuit, which claimed breach of contract, focused on financial guaranty insurance Assured provided in 2006 and 2007 to three mortgage-backed securities transactions.
Assured has filed similar lawsuits against units of JPMorgan Chase & Co (JPM.N: Quote), Credit Suisse CSGN.VX and Flagstar Bancorp Inc (FBC.N: Quote). It had earlier reached settlements with Bank of America (BAC.N: Quote) for $1.1 billion and Deutsche Bank (DBKGn.DE: Quote) for $165.6 million, without filing lawsuits against them.
Assured's shares closed at $20.83 on the New York Stock Exchange on Friday.
(Reporting by Tanya Agrawal in Bangalore; Editing by Saumyadeb Chakrabarty)
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