San Jose, CA (PressExposure) February 17, 2009 -- US corporate insurance stalwarts First American Trust Co. are today feeling vilified by the news that US President Obama is poised to push through a $787Bn economic stimulus plan - a package which will surely yield a positive spin on insurers risk exposures.
In a recent session of top US insurance underwriters, held in Washington DC, First American Trust Co. among others, were said to be aggressively lobbying the new administration for maximum support, given their exposure to corporate amalgamations which have recently been labeled high-risk by analysts, due to the potential for loan defaults and credit downgrades.
Representatives from Zurich were also said to be out in force in the Capitol following a slew of negative news surroundings M&A deals they are facilitating, which had resulted in adverse movements in the acquiring parties stock prices.
In the absence of such a comprehensive bailout, it had been speculated that large scale corporate insurers such as Zurich and the Manhattan-based First American Trust Co. could well have borne the brunt of a number of buyout deal collapses, as high-potential SMEs whose corporate financing had dried up were left with little option but to entertain buyout overtures by more established, cash-positive players.
Once rumors of the share deals started to circulate and investor cash was on the table - possibilities such as the acquiring party's plummeting share price sinking the deal or a cash-driven crisis within the target entity could have effectively left the likes of First American Trust Co liable for massive costs.
However, the imminent prospect of a stimulus package, which has now been approved by congress, offers much needed stability to the insurers, who effectively guarantee investors positions prior to completion.
A spokesman from First American Trust Co was unwilling to comment, but DC-based sources close to the New-York firm have indicated that their executive team was more than satisfied with the news.