See: American Municipal Bond Assurance Corporation.
Bonds are promises. Think: your bond is your word, or something like that.
When a given issuer (like a company, a country, or an individual) issues a bond, i.e. asks investors to rent them cash for a period of time for a given interest rate, there exists an implicit promise that the dough will be paid back. There is an additional entity guaranteeing that, if the issuer fails or reneges or just sucks,the other party will repay all the interest and principal on the bond. It gives reassurance to the lenders who likely then can be convinced to drop their interest rates a tad, or to at least make the loans in the first place versus just a cold "pass."
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Finance: What is AMBAC?9 Views
Finance allah shmoop what is am back and back You
know with that from poltergeist You know the scene where
the ghost appears for the tv set You know the
movie steven spielberg and all that you are Well guess
not Well ambac stands for something fastly less exciting than
ghosts It is the american municipal bond assurance corporation And
if you did something really bad in a former life
you have to come back and run this thing And
what is it Well it's basically a life insurance company
for bombs particularly munich bonds insurers underwriters investors and others
pay a relatively small fee to ensure the bonds in
which they invest and in return and back keeps a
bunch of dough in their pockets ready to step in
Should bond get close to the red line of not
being able to Hey it's interest knocking on the door
of deadbeat land Well am back is an actual publicly
traded corporation ticker a mbc who was destroyed in the
financial crisis of await no nine finally having to declare
bankruptcy itself ironically in two thousand thirteen with all due
irony inserted here and a little bit of snicker it
emerged from that mass with new management and vision and
a massive infusion of cash onto its balance sheet Will
am back Is sort of like the crazy uncle with
a bunker made of concrete thirty feet underground in central
new mexico waiting for that big one Just to be
sure humans remain around to populate the earth For the 00:01:28.178 --> [endTime] you know unclear Future doctor Strange Whoa
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