S&P: BofA unaffected

Standard & Poor's said the A and A-1 ratings and negative outlook on Bank of America Corp. are unchanged following its announced settlement with Freddie Mac and Fannie Mae addressing its remaining exposure to repurchase obligations for residential mortgage loans sold directly to the government-sponsored entities (GSE).

The agreement reduces the uncertainty regarding the bank's exposure to GSE mortgage representation and warranty liability, S&P said.

However, the recent court decision allowing MBIA, a monoline insurer, to use statistical sampling in making its case for representation and warranty claims on securitization deals it insured for Bank of America tempers the positive aspects of the settlement.

The GSE exposure of the representation and warranty issue is, in S&P's view, significantly larger than the estimated potential monoline exposure.

The agency said it will continue to monitor the bank's representation and warranty exposures as they evolve.

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