Wilbur Ross in talks to buy Ambac
Written on January 25, 2008
Billionaire Wilbur Ross is in serious talks to take over Ambac Financial Group Inc (ABK.N: Quote, Profile, Research), according to a media report, but broader efforts to rescue the sector will take some time, a New York state regulator said on Thursday.
Wilbur Ross said in December he was looking at investments in bond insurers. The U.K.’s Evening Standard reported on Thursday that he is in talks with Ambac that are “serious and progressing well.”
But New York’s insurance regulator said earlier on Thursday that any plan to shore up the insurers that guarantee $2.5 trillion of bonds will take time because of the complexity of the issues and the number of parties involved.
Concerns the insurers might lose their top credit ratings, forcing massive bond losses for investors and lifting consumer borrowing costs, have weighed down global stock and bond markets all week.
Bond insurers have suffered billions of dollars of write- downs in recent months and are expected to sustain more, after insuring debt hit by the subprime mortgage crisis http://easy-quick-payday-loans.com. Many investors fear they have too little capital given their obligations.
Federal legislators are starting to take note. A U.S. House Financial Services subcommittee said on Thursday it is examining the bond insurance industry and will soon hold hearings on potential regulatory reforms.
State investigators are watching the situation closely, too. MBIA said on Thursday that Massachusetts’ Securities Division subpoenaed the company for information regarding bonds it insured between January 1, 2006, and the present, that were issued by governments in the state.
The recent bond insurer rating downgrades and the potential for more cuts could affect all aspects of the financial marketplace, U.S. Rep. Paul Kanjorski, chairman of the capital markets subcommittee, said in a statement.
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