Buffett rides to rescue of bond insurers

Warren Buffett has made an offer to three large municipal bond insurers to reinsure $800 billion in municipal bonds.
FEB 12, 2008
By  Bloomberg
Warren Buffett, the world's third richest person, has made an offer to three large municipal bond insurers to reinsure $800 billion in municipal bonds, effectively giving them a AAA credit rating. In an interview on CNBC television, Mr. Buffett said his Omaha, Neb.-based Berkshire Hathaway Inc. holding company made the offer to reinsure bond issuers Ambac Financial Group Inc. of New York, Armonk, N.Y.-based MBIA Inc. and New York-based Financial Guaranty Insurance Co. Each of those insurers is in danger of losing their AAA rating due to problems with subprime mortgages and other loans. Mr. Buffett said that the offer is designed to make Berkshire Hathaway money. Additionally, he is not offering to take on liability for riskier investments insured by the three companies, such as CDOs. Mr. Buffett said that he sent the offer to the bond insurers last week, and that he is giving them 30 days to find a better deal. He said one firm rejected his offer, and that he was still waiting to hear from the other two. However, Mr. Buffett did not say which company rejected the offer.

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.