Bank of America's $8.5bn mortgage-bond settlement is 'outstanding' for investors, said a Pacific Investment Management executive, who defended the deal against opposition.
Bloomberg reports that the settlement was reached after an investor group that included Pimco and BlackRock at first demanded $12bn, 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 Thursday.
'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 is fighting the settlement, saying Bank of America isn’t paying enough to compensate investors.
In the meantime, Reuters reports that Credit Suisse may sell part of its private bank in Germany to improve profitability in Europe, a source close to the bank said on Thursday.
In December Zurich-based Credit Suisse shrank its German private bank branch network to nine from 12 and said it would lay off 150 of 500 staff.
Finally, the news agency also reports that UBS has been placed under formal investigation for alleged complicity in suspected illegal sales practices, the French prosecutor's office said on Friday, a week after the bank's French unit suffered the same fate.
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