Associated Press - June 20, 2008 2:15 PM ET OMAHA, Neb. (AP) - Warren Buffett's bond insurer will likely be the primary beneficiary of the latest credit rating downgrades on Ambac Financial Group Inc. and MBIA Inc. Buffett's Berkshire Hathaway Inc. launched its own bond insurer late last year to take advantage of the credit problems other bond insurers were having, and those problems have only worsened since then. Ambac and MBIA have now been downgraded by Moody's Investors Service, Standard & Poor's and Fitch Ratings. The rating agencies worried the insurers wouldn't be able to cover a potential spike in claims. Bond insurers essentially need "AAA" ratings to book new business, and Berkshire Hathaway Assurance is 1 of the only insurers left with a solid "AAA" financial rating.
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