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Could Subprime Fallout Hit Munis

Daily Brief

by Liz Gunnison, Jeffrey Cane, Mark Stein, Laura Rich and Megan Barnett
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Aug 20 2007 12:00am EDT

Could Subprime Fallout Hit Munis?

Municipal bond insurers like MBIA and Ambac have come under scrutiny because their products were one of several means used by underwriters of collateralized debt obligations to enhance the credit quality of the vehicle.

While the insurers say they have been conservative in their exposure to subprime, that may not be enough in the current environment.

And that could have implications for municipalities trying to raise money.

Yves Smith's full Market Movers blog post on this subject can be found here.

Laura Rich is a co-founder of Recessionwire, which provides news, advice, perspective and humor about the recession and the recovery.

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