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Feb 11 (Reuters) - New York-based municipal bond insurerMBIA Inc's unit MBIA Insurance Corp entered an agreementto settle a litigation it filed in 2009 against lender CreditSuisse and certain affiliated entities over propertydebt in the United States.
The settlement followed a post-trial decision by a courtawarding MBIA about $604 million in damages, MBIA said in astatement on Thursday.
Pursuant to the settlement, Credit Suisse has paid MBIA Corp$600 million, it said. But following the settlement agreement,the court dismissed the action, it added.
MBIA sued Credit Suisse, the second-biggest bank inSwitzerland, in 2009 over hundreds of millions of dollars itpaid out to compensate investors after thousands of propertymortgages failed in the United States.
In November, New York Supreme Court Justice JenniferSchecter ruled that Credit Suisse breached its representationsand warranties to MBIA, which indemnified investors inresidential mortgage backed securities issued ahead of the 2008financial crisis.
The judge found that more than half of the mortgages in thetransaction at issue were non-conforming and that MBIA "did notassume the risk of loss that they posed."
Credit Suisse had already set aside $300 million inconnection to the long dispute with MBIA, but it said inDecember that it expected the figure to rise to $680 million.
"We are pleased to have resolved this legacy matter," aCredit Suisse spokeswoman said in a separate emailed statement.
"The settlement amount of $600 million is substantially lessthan our earlier guidance of up to approximately $680 millionand has been fully provisioned for in our 4Q 2020 results, dueto be announced on 18th February."(Reporting by Nandakumar D and Kanishka Singh in Bengaluru;Editing by Rashmi Aich)