Berkshire Hathaway Assurance
Encyclopedia
Berkshire Hathaway Assurance is an bond insurance
company created by Berkshire Hathaway
, Inc. in December, 2007.
. These type bonds are issued by local governments to finance public works projects such as schools, hospitals, roads, and sewer systems. Berkshire is not guaranteeing BHA, thus opening itself to competition from any number of investors who could easily assemble the $5 billion capital. BHA will begin in New York, then move to California, Puerto Rico, Texas, Illinois, and Florida. On February 12, 2008, Warren Buffett
announced a plan to add up to $5 billion in capital to BHA to enable it to provide reinsurance on municipal bonds currently guaranteed by Ambac
, MBIA, and FGIC Corp. Buffet also announced BHA had closed its first deal to insure $50 million in debt for a 2% fee.
Bond insurance
Bond insurance is a type of insurance whereby an insurance company guarantees scheduled payments of interest and principal on a bond or other security in the event of a payment default by the issuer of the bond or security...
company created by Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
, Inc. in December, 2007.
History
Berkshire created this government bond insurance company in December, 2007 to insure municipal and state bondsMunicipal bond
A municipal bond is a bond issued by a city or other local government, or their agencies. Potential issuers of municipal bonds includes cities, counties, redevelopment agencies, special-purpose districts, school districts, public utility districts, publicly owned airports and seaports, and any...
. These type bonds are issued by local governments to finance public works projects such as schools, hospitals, roads, and sewer systems. Berkshire is not guaranteeing BHA, thus opening itself to competition from any number of investors who could easily assemble the $5 billion capital. BHA will begin in New York, then move to California, Puerto Rico, Texas, Illinois, and Florida. On February 12, 2008, Warren Buffett
Warren Buffett
Warren Edward Buffett is an American business magnate, investor, and philanthropist. He is widely regarded as one of the most successful investors in the world. Often introduced as "legendary investor, Warren Buffett", he is the primary shareholder, chairman and CEO of Berkshire Hathaway. He is...
announced a plan to add up to $5 billion in capital to BHA to enable it to provide reinsurance on municipal bonds currently guaranteed by Ambac
AMBAC
AMBAC may refer to:* Ambac Financial Group, a bankrupt American financial services company* Active Mass Balance Auto Control, a component of Universal Century technology in the fictional Gundam universe...
, MBIA, and FGIC Corp. Buffet also announced BHA had closed its first deal to insure $50 million in debt for a 2% fee.