Bank of America Corp. is seeking to buy the majority of $329 million of MBIA Inc. bonds to block the insurer's efforts to distance itself from a cash-strapped unit that sold products protecting the lender from losses on more than $6 billion of debt. MBIA fell the most in three years.

Bank of America's bid follows a move by MBIA last week to persuade bondholders to change the terms governing almost $900 million in bonds, which would prevent a regulatory seizure of its MBIA Insurance Corp. unit from dragging the parent into bankruptcy. That would leave policyholders including Bank of America holding guarantees from an insurer that can't make good on claims.

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