MBIA, BofA reach $1.7 billion settlement
MBIA, an insurance company that had been in danger of being unable to meet its obligations within a few months, has reached a $1.7 billion agreement with Bank of America over disputes stemming from MBIA’s insurance of mortgage-backed securities that became troubled when the financial crisis blossomed, the New York Times reported. The agreement will cancel out the multibillion-dollar claims each institution had against the other. Under the tentative agreement, Bank of America will pay about $1.6 billion in cash to MBIA. The bank will also surrender to MBIA about $100 million in MBIA bonds that the bank had purchased, the Times said, citing an anonymous source.
Marano steps down as CEO of ResCap
Thomas Marano is leaving the chief executive’s post at Ally Financial Inc.’s bankrupt Residential Capital mortgage unit as creditors wrangle over who will pay for the firm’s soured home loans. Marano, recruited in 2008 to turn around New York-based ResCap, agreed to continue as an outside director to help facilitate a smooth transition while he pursues other interests, according to the firm. He remains chairman, according Alex Stockham, a ResCap spokesman. ResCap was among the biggest U.S. subprime lenders, specializing in loans to people with weak credit. Such loans were blamed for fueling the U.S. housing bubble, and record defaults propelled ResCap into bankruptcy in May 2012.
GM plans to invest $16 billion in U.S. plants
General Motors Co., profitable for 13 consecutive quarters, is planning to invest about $16 billion on U.S. factories and facilities through 2016, more than it will spend in China, the company said. “The $11 billion in capital that will be spent in China by 2016 is coming out of our joint ventures rather than Detroit and is far less than the approximately $16 billion in capital GM will invest in the U.S. over that time,” Selim Bingol, GM vice president of public policy, said in a letter published in the Wall Street Journal. GM disclosed the U.S. investment figure after announcing the $11 billion investment for its joint ventures in China last month in Shanghai. That was an increase from a 2011 outline to spend $7 billion through 2015.
E.U. to examine Motorola’s lawsuit vs. Apple
The European Union said Google’s Motorola Mobility cellphone unit may have violated E.U. antitrust regulations by seeking to block Apple products based on a patent claim. European regulators said in a preliminary ruling that Motorola may have abused its “dominant position” in the mobile phone market by suing Apple to protect a patent that covers technology deemed necessary for a device to work with industry standards. Companies that hold these kinds of “standard essential” patents are supposed to work with competitors to designate fair licensing rates for these necessary technologies. If Motorola is found to have violated those rules, it could face a fine from the E.U.
Private equity firms to acquire BMC Software
Bain Capital and Golden Gate Capital agreed to acquire BMC Software Inc., the company that abandoned a sale last year, for $6.9 billion in the third-largest private-equity deal of 2013. The buyout investors, which also include GIC Special Investments Pte Ltd. and Insight Venture Partners, agreed to pay $46.25 a share in cash, BMC said. Elliott Associates LP, which owns a 9.6 percent stake, will vote in favor of the transaction, BMC said. BMC sells software that manages fleets of computer servers and mainframes, configuring new machines and applying updates to older ones.
Optimistic Buffett sees more growth ahead
Billionaire investor Warren Buffett said he sees the economy slowly improving and hailed Federal Reserve Chairman Ben Bernanke as “gutsy” for the actions the central bank has taken to boost growth. Buffett told CNBC that he was not concerned about the financial markets’ recent record highs, saying he recalled when the Dow Jones industrial average first crossed 100 points. Investors shouldn’t shy away from the markets, he said. “Probably in my lifetime, and certainly in your lifetime, you will see markets that are far higher than this,” Buffett told CNBC’s Becky Quick.
FROM NEWS SERVICES