http://www.bloomberg.com/apps/news?pid=20601087&sid=aDdMwdVFSiok&refer=home Dec. 28 (Bloomberg) -- MBIA Inc. and Ambac Financial Group Inc., the two largest bond insurers, fell in New York Stock Exchange trading after billionaire investor Warren Buffett said he plans to start a rival company to guarantee municipal debt. Ambac dropped as much 15 percent, the most in two months, and MBIA fell as much as 17 percent after Buffett's Berkshire Hathaway Inc. said it plans to insure bonds in New York and at least four other states. Berkshire, which gets half its profit from insurance, is challenging the bond insurers as they struggle to retain the AAA credit ratings that allow them to guarantee about $1.2 trillion of municipal bonds. MBIA, Ambac and other guarantors are under scrutiny amid concern they don't have enough capital set aside to cover potential losses on bonds they insure that are linked to subprime mortgages. ``Investors might feel more comfortable investing in bonds insured by Buffett than those backed by an insurer with the legacy of the credit crisis hanging over them,'' said Matthew Maxwell, a London-based credit analyst at Calyon, the investment banking unit of Credit Agricole SA. Bond insurers ``are hurting, so now is a good time for Buffett to be getting into the market.'' Buffett, 77, said in an interview today on News Corp.'s Fox Business Network that it will be easier to break into the bond insurance market now than it would've been a couple of years ago because rivals are facing pressure on their ratings. He told the Wall Street Journal that Berkshire Hathaway Assurance Corp. will also seek permission to operate in California, Puerto Rico, Texas, Illinois and Florida. Jackie Wilson, a spokeswoman for Omaha, Nebraska-based Berkshire, confirmed Buffett's plans.