S&P's And Calpers Settle Suit Over Mortgage Deals For $125 Mln : Report

(RTTNews) - Standard & Poor's Ratings Services, a part of McGraw Hill Financial Inc (MHFI), has reached a $125 million settlement with the nation's largest pension fund to resolve a case involving inflated grades of residential-mortgage deals that later faltered, the wall street Journal reported citing people familiar with the matter.

The payout to the California Public Employees' Retirement System, or Calpers, resolves a lawsuit that the pension fund brought against S&P in 2009. The Calpers settlement is expected to be announced Tuesday morning, the report said.

The Calpers settlement will bring S&P's total payout to resolve the latest round of crisis-era lawsuits to $1.5 billion. In a separate batch of settlements, S&P will pay $1.375 billion to the Justice Department and more than a dozen states to resolve lawsuits over inflated residential mortgage bond ratings.

Calpers also reportedly named Fitch Ratings and Moody's Investors Service in the lawsuit. Fitch previously settled, though the pension fund will continue to pursue Moody's.