Billionaire investor Warren Buffett has offered a deal to three bond insurers hit by the sub-prime crisis.
Warren Buffett is targeting the insurers' lower-risk business
He offered to takeover the insurance of $800bn-worth (£408bn) of local government bonds, currently covered by MBIA, Ambac Financial and FGIC.
Those companies are under pressure because they also insured assets backed by mortgages that are now in trouble.
In an interview with CNBC, Mr Buffett said one of the firms had rejected the deal and two had not yet responded.
Mr Buffett's investment company, Berkshire Hathaway, would invest $5bn as part of the plan.
The move is being seen as an attractive deal for Mr Buffet as he could take over a large piece of relatively low-risk business.
The bonds he is offering to insure were issued by local governments, which rarely fail to pay their interest.
The three companies he approached would be left with the much higher risk business - insuring bonds backed by mortgages given to homeowners with poor credit histories.
With US house prices falling and increasing numbers of homeowners failing to keep up their mortgage payments, those bonds have collapsed in value.
"It's a huge move. Buffett is trying to capture a huge piece of the market share because of what he sees as a weakness in the whole sector," said Rob Haines, insurance analyst at Creditsights, New York.