bail-out ?

[chen]

"There was also much speculation about a bail-out of America's troubled bond
insurers."
what does "a bail-out" mean here? be forced to stop business ? or something else?

 

[Mister Micawber]

.
No, bail-out means to save (usually by a fee injection of funds).

Bail out:

2. an instance of coming to the rescue, esp. financially: a government bailout of a large company.

–adjective
4. of, pertaining to, or consisting of means for relieving an emergency situation: bailout measures for hard-pressed small businesses.

 

[vil]

Hi Chan,

There are another meanings of the verb in question:

To escape (jump) from a plane, using a parachute.

For example, When the second engine sputtered, the pilot decided to bail out.

To escape from a situation that you do not want to be in any more. Give up on something, abandon a responsibility, as in

After ten years in the business, Mr. Arthur is bailing out.

The company was not doing well, so John decided to bail out while he could still find another job.

To live a large sum o money with a court so that someone can be let out of prison while waiting for their trial.

Clark’s family paid &500 to bail him out .

To remove water that has come in a boat.

Regards.

V.

 

[RonBee]

Re:

"There was also much speculation about a bail-out of America's troubled bond insurers."
​

People were talking about the possibility of the government coming to the rescue (financially) of those bond insurers either with loans or otherwise (with money that doesn't need to be paid back).

~R

 

[vil]

Hi chen,

bailout = fin. a rescue, esp. by giving or lending money to a person or organisation in great financial difficulties.

bailout facility = the ability to get out of a capital investment project without losing most of the capital investment at the start. A bailout facility may take the form of agreements covering buyback of capital equipments, guarantee of contract payments, etc. While decreasing the risk of large loss, a bailout faculty usu. results in a slightly higher level of capital investment while the project is alive.

There is half a score excerpts of the article in question, which give an account of the accordingly financial support to help the distressed firms out of trouble.

Those fears prompted a reported meeting between a number of Wall Street banks and New York Insurance Superintendent Eric Dinallo who implored them to provide capital for these troubled insurers in an effort to prevent that from happening.

There has also been plenty of speculation that a private equity or a distressed opportunity investor could step in to rescue these troubled firms, including famed distressed opportunities investor Wilbur Ross, who was reportedly in takeover talks with Ambac representatives.

Speculation about the Wall Street bailout sent shares of both Ambac and MBIA soaring in Thursday trade, leaving interested investors to face a much bigger price tag, noted John Atkins, credit analyst IDEAglobal.

One palatable remedy for bond insurers, is pushing off some of their risk to the reinsurers, which act as a backstop for these companies.

Similar deals could be struck with a handful of other reinsurers, but it's unlikely Ambac or MBIA would be able to find companies willing to insure the risky parts of their portfolio.

If firms like Ambac and MBIA are get hit with a downgrade and fail to find a life preserver from either Wall Street or an outside investor, they could initiate a run-off on their toxic securities portfolio, essentially refusing to write new policies and instead focusing on the bond insurance business they relied on for years before.

Last month, Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500) announced plans to open a bond insurance business in New York State and is already attracting the attention of customers of Ambac and MBIA. And shares of Assured Guaranty gained in Friday trade after a JPMorgan Chase analyst bet that the company will boost its business in the coming month.


Regards.

V.