Buffett is likely to benefit from bond insurance turmoil

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OMAHA, Nebraska: Warren Buffett's timing is once again impeccable. His six-month-old bond insurance business will likely be the primary beneficiary of the latest credit rating downgrades on Ambac Financial Group and MBIA.

Buffett's Berkshire Hathaway started its own bond insurer late last year as credit problems began to mount for others, and those problems have only worsened since then.

Bond insurers depend on "AAA" ratings to book new business.

"I think there is a presumption in the market that Buffett's municipal bond insurer is the only one that is 'AAA' by any standard," said Edward J. Grebeck, the chief executive of Tempus Advisors. "The rating agency downgrade will be good for Buffett's business."

IHT