Bank of America Corp.’s $8.5 billion mortgage-bond settlement is “outstanding” for investors, said a Pacific Investment Management Co. (Pimco) executive, who defended the deal against opposition, Bloomberg News reported today. The settlement was reached after an investor group that included Pimco and BlackRock Inc. at first demanded $12 billion, eventually coming down to a “take it or leave it” offer of $8.5 billion, Kent Smith, an executive vice president at Pimco who helped negotiate the agreement, testified yesterday. 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 Inc. is fighting the settlement, saying that Bank of America isn’t paying enough to compensate investors.
