Barings PLC bondholders who lost $437 million when the U.K. investment bank collapsed in 1995 have reached an agreement with Ernst & Young, the investment bank's administrator, to settle outstanding claims.

Officials of the accounting firm said the agreement had been reached, but it was still subject to a court review in the next few months. Details were not revealed.

Bondholders of Barings PLC, the holding company that was not bought when ING Groep NV purchased the investment banking unit, will probably get about half the money they're owed, Jim Peers, ING Barings' secretary, said in an interview.

The Times newspaper in London reported last month that compensation would be paid to small investors and large life insurers and pension funds, such as Legal & General Group PLC and Scottish Amicable Life Assurance Society.

Contribution to the settlement is to come from Cazenove & Co., Barclays PLC's BZW, ABN Amro Holding NV's Hoare Govett, Coopers & Lybrand LLP, and Deloitte & Touche LLP, auditors to Barings, the newspaper said.

Bondholders lost money on three issues of debt securities when Barings collapsed-bonds with a face value of $150 million issued in 1986; $150 million in bonds issued in 1994; and $162 million in perpetual notes.

Barings collapsed Feb. 24, 1995, amid losses on Asian futures and options markets after two years of unauthorized trading by an employee in Singapore, Nicholas Leeson. Its assets were taken over by ING, which agreed to assume the losses.

Mr. Leeson is serving a six-and-a-half-year jail sentence in Singapore for the trading offenses and for forgery.

On Feb. 20, the Bank of England and the U.K.'s top market regulator defended their handling of the Barings collapse in a report published by a U.K. parliamentary committee that probed the failure.

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