Oct. 16 (Bloomberg) -- Ambac Financial Group Inc. and other bond insurers are working on a plan to send to the U.S. Treasury that would enable them to sell troubled assets to the government, Chief Executive Officer Michael Callen said.
The companies also may present a proposal next week that would allow the insurers to guarantee some assets with government backing, Callen said in an interview today.
``We're working hard to put together a proposal and it's got to be an industry proposal,'' Callen said. ``We don't have a lot of time.''
The Treasury's $700 billion program to buy troubled assets may allow the two guarantors to dispose of bonds backing collateralized debt obligations that they guaranteed, Royal Bank of Scotland Plc analyst Michael Cox said in a research report. Banks also may be more willing to cancel credit-default swap contracts they bought from bond insurers if the banks can sell the underlying CDOs to the government, Cox wrote.
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