In a live telephone call to Squawk Box of CNBC, 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 subprime mortgages and other loans.
Buffett told that he sent that offer to the bond insurers last week, and that he's giving them 30 days to find a better deal.
According to Buffett 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.
Here is the link to that letter sent by Ajit Jain (CEO of several reinsurance businesses for Berkshire)
Link to article
What do you think about this offer?
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