A decision by Ross to launch a new bond insurer could put even more pressure on the embattled sector, where MBIA Inc <MBI.N> and Ambac Financial Group <ABK.N> have suffered severe write-downs in recent months linked to their guarantees on subprime mortgage securities.
NEW YORK (Reuters) - Billionaire Wilbur Ross is weighing the merits of investing in an existing bond insurer or starting his own firm, the Financial Times reported on Friday.
A decision by Ross to launch a new bond insurer could put even more pressure on the embattled sector, where MBIA Inc <MBI.N> and Ambac Financial Group <ABK.N> have suffered severe write-downs in recent months linked to their guarantees on subprime mortgage securities.
Like Ross, some private-equity firms like TPG may also be considering launching new bond insurers, the report said. In late December, billionaire investor Warren Buffett's Berkshire conglomerate won its own license from New York state.
The threat of fresh competition adds to the woes of the bond insurers, which analysts fear may lack the cash to fulfill obligations on roughly $930 billion of structured finance securities.
!ADVERTISEMENT!Concerns the insurers might lose their top credit ratings, forcing massive bond losses for investors and lifting consumer borrowing costs, have weighed on global stock and bond markets all week.
On Wednesday, New York's insurance regulator pressed major Wall Street banks to put up billions of dollars to support the bond insurers, which guarantee interest and principal payments on $2.5 trillion of bonds.
(Reporting by Neil Shah, Editing by Chizu Nomiyama)
