(Reuters) – A long-running legal dispute between Bank of America Corp. and insurer MBIA Inc. could be settled in early 2013 after recent maneuvers involving MBIA's bonds, analysts at research firm CreditSights wrote.
MBIA won the necessary consent of bondholders to change the terms of some of its debt last month, despite a move by Bank of America to thwart the change. That outcome has reduced the bank's negotiating leverage, increasing the likelihood of a settlement, the analysts wrote in a report dated Tuesday.
Bank of America, the second largest U.S. bank by assets, last week also said that it was proceeding with an offer to buy some of MBIA's bonds, which could be part of a settlement strategy, according to the report. [ID: L1E8N6098] The bank took a similar approach in a pact this year with insurer Syncora Holdings Ltd, CreditSights said.
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