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US Regulators Move to Rescue Shaky Bond Insurers


U.S. regulators are working to secure help for two of the nation's largest companies that guarantee bond investors against losses.

The two bond insurers, Ambac and MBIA, have guaranteed more than one trillion dollars in bonds.

Regulators worry that if weakened bond insurers do not get major new capital, they will be unable to deliver on their promise to pay investors if borrowers default on their debts. That would leave bond investors, including many banks and pensions funds, with billions of dollars in losses, causing further turmoil in the financial markets.

Insurance regulators met Wednesday with some of the biggest financial institutions in the U.S. to discuss a potential bailout.

The talks focused on raising as much as $15 billion for the bond insurers and boosting MBIA and Ambac's weakened credit rating.

Some information for this report was provided by AP.

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