“Assured Guaranty Ltd., MBIA Inc. and Radian Group Inc. have ‘substantial’ exposure to Puerto Rico bonds that in some cases outstrip the assets available to cover unexpected losses, according to Moody’s.  A 2028 bond without bond insurance recently traded at about 74 cents on the dollar, according to the Electronic Municipal Market Access website.  Some municipal-bond investors questioned the value of bond insurance following the financial crisis, when bond insurers suffered losses after guaranteeing risky mortgage-backed securities and lost their top credit ratings. The number of new municipal bonds that carry bond insurance has fallen in recent years.”

http://blogs.wsj.com/moneybeat/2014/07/07/trouble-could-be-looming-for-puerto-rico-bond-insurers/

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