Bank of America Corp. is seeking to buy the majority of $329 million of MBIA Inc. bonds to block the insurer’s efforts to distance itself from a cash-strapped unit that sold products protecting the lender from losses on more than $6 billion of debt, Bloomberg News reported yesterday. Bank of America's bid follows a move by MBIA last week to persuade bondholders to change the terms governing almost $900 million in bonds, which would prevent a regulatory seizure of its MBIA Insurance Corp. unit from dragging the parent into bankruptcy. That would leave policyholders including Bank of America holding guarantees from an insurer that cannot make good on claims. Bank of America units bought credit-default swaps backed by MBIA that protect the lender from default on $6.2 billion of debt, the bank said.
