"Municipal Debt Securities May Be Next Danger Zone After SIVs"

Dec 19 07

"Municipal Debt Securities May Be Next Danger Zone After SIVs" says Bloomberg. The article cites a report by CreditSights "The Muni Meltdown - Are TOBS the next SIVs?", and asks if the $400 billion tender-option bond marketplace, which sells some debt to municipal money market mutual funds, may be the next "financial danger zone". The article and report cite concerns over bond insurers MBIA, FGIC and Ambac as potential risks to the TOB and variable-rate demand note (VRDN) marketplace. See also, "Ambac, MBIA Outlook Lowered by S&P, ACA Cut to CCC".

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