Bank of America agreed to pay $315 million (€235.6 million) to settle claims by investors who said they were misled about mortgage securities offerings by its Merrill Lynch unit.

It is one of the largest settlements for investors claiming that banks misrepresented the quality of mortgage-backed securities they sold.

The proposed settlement, which requires court approval, was filed late last night with the US District Court in Manhattan.

Bank of America is the second-largest US bank. It bought mortgage lender Countrywide Financial Corp in July 2008 and Merrill six months later.

A Bank of America spokesman was not immediately available for comment. The Charlotte, North Carolina-based lender did not admit wrongdoing in agreeing to the settlement. Reuters earlier reported the size of the settlement.

Investors led by the Public Employees' Retirement System of Mississippi pension fund had sued over their purchases of so-called mortgage pass-through certificates in 18 securities offerings involving Merrill.

They contended that the offering documents that Merrill prepared contained false statements or omitted key details about the quality of the loans backing their investments.

Many of these loans were risky, and were made by lenders such as Countrywide and the now-bankrupt IndyMac Bancorp Inc and New Century Financial Corp, the investors said. Though their securities were at first largely rated investment-grade, most eventually fell to "junk" status and lost value, they added.

Reuters