CNBC: Buffett Offers to Reinsure $800B in Municipal Bonds
In a phone call to CNBC this morning, Warren Buffett stated that he has a plan to help the troubled bond insurance situation. Shares of Ambac and MBIA, two of the largest bond insurers, rose right after the interview was aired early this morning.
In a live telephone call to the CNBC Squawk Box, Buffett offered to reinsure $800 billion in municipal bonds now insured by Ambac, MBIA and FGIC, effectively giving them a AAA credit rating. Those insurers are in danger of losing their AAA credit ratings due to problems with sub-prime mortgages and other loans.
Buffett tells CNBC he sent that offer to the bond insurers last week, and that he's giving them 30 days to find a better deal.
Buffett says one bond insurer turned him down, and he hasn't yet heard from the other two. Buffett wouldn't say which company turned him down. He said he didn't think regulators could do much to force the bond insurers to accept his offer, unless they took over the companies themselves.
The billionaire says this is an offer designed to make Berkshire Hathaway money, not to just do a good deed.
Source: Source: CNBC | Published on February 12, 2008
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