End of Muni Bond Insurance?

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Bloomberg is reporting that municipalities are beginning to shy away from insuring their bond issues. Issuers who have recently issued uninsured bonds include the states of Wisconsin and California, and the city of New York.

Update. Felix Salmon puts it more pungently: Munis Back Away From Ratings-Agency Domination. Munis have very low default rates, sufficiently low that most would merit triple-A ratings if they were corporate bonds. The ratings agencies apparently rate them by a more stringent scale, which historically has made bond insurance attractive.

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One Response to “End of Muni Bond Insurance?”

  1. Buffett to Back Bonds? « Short Interest Says:

    […] to Back Bonds? Well the death of muni bond insurance was short indeed. Rumor has it that Berkshire Hathaway is about to launch its own municipal bond […]

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