Fitch affirms Bank of America

Fitch Ratings said it affirmed Bank of America Corp.'s preferred stock at BBB, long-term issuer default rating at A+, long-term senior debt at A+, long-term subordinated debt at A, short-term issuer default rating at F1+ and short-term debt at F1+.

The ratings remain on Rating Watch negative.

The affirmation follows the bank's announcement of a settlement to resolve rep and warranty, servicing and documentation claims related to $424 billion of Countrywide RMBS securities, the agency said. Bank of America will pay $8.5 billion for this settlement.

This settlement is a favorable development, the agency added. The acceleration of these charges into second quarter 2011 decreases future financial uncertainty and considerably reduces the drag on future earnings from this issue.

The affirmation incorporates the expectation that Bank of America will be able to build capital to a level more in line with major U.S. peers by year-end 2011, the agency added. In future years, Fitch said it anticipates that Bank of America will increase capital further in view of Basel III capital standards and an additional capital buffer for systemically important financial institutions.

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