Lombardy, a region in Italy, has reached separate settlements with Bank of America's (NYSE:BAC) Merrill Lynch and UBS (NYSE:UBS) in a long-boiling dispute over derivatives tied to a $1 billion bond issue, according to a statement from the region obtained by The Motley Fool and reports from Bloomberg and Reuters. The banks had entered into a swap arrangement with the region that allowed it to repay the 2002 issue in a series of installments, as opposed to a one-time payment on maturity in 2032. The region alleged that the lenders had committed fraud in hiding their fees.

B of A and UBS brought suit in a London court against Lombardy to uphold the swap arrangement.

In its statement, the region said that, without an admission of liability from either party, it and Merrill Lynch had agreed to put aside their differences and continue their collaboration. It said neither party would comment further.

According to Reuters, the region's agreement with UBS ends the dispute. The news agency said the region did not elaborate on precisely what that entailed.

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