From the Wall Street Journal:
Shares of the largest bond insurers fell early Friday amid news that billionaire investor Warren Buffett's Berkshire Hathaway Inc. is starting a bond insurer.
Security Capital Assurance Ltd., the fifth-largest triple-A rated bond insurer in net outstanding insurance, saw its shares rise 1.8% to $3.93.
Credit default swaps for the bond insurers also widened from 0.1 to 0.3 percentage point on the Buffett news, said Sid Bakst, managing director and portfolio manager at Robeco Weiss Peck & Greer. "It's a very real and formidable competitor for those guys," he added.
Financial Guaranty Insurance Co.'s credit default swaps widened by 0.25 percentage point to 6.25 points. This means the annual cost of protecting a notional $10 million of its bonds against default for five years is now $625,000, versus $600,000 earlier....MOREHere's the story from MarketWatch:
Berkshire Hathaway to buy reinsurer from ING