Macquarie eyes bond insurance

Reuters reported that Macquarie Group is planning to set up a bond insurance arm in the US.

The New York state insurance superintendent confirmed the plan after a public notice appeared in the New York Times on Monday.

The advertisement advised of a plan to establish a Municipal and Infrastructure Assurance Corporation.

Bond insurers have had a rough time since the sub-prime mess engulfed the US and global capital markets in the middle of 2007, with ratings downgrades (actual or threatened) and most insurers having to top up their capital.

What Macquarie's business plan for any new bond insurer may be, and how much capital the bank may plan to allocate to the business, and with what partners, isn't clear.

The advertisement said the amount of proposed capital would be $2.5 billion and the principal office would be located in New York, according to Reuters.