Monoline Insurer News

Here’s an enlightening blog post about how auction rate securities have made it into banal lunch time conversations.  No one ever thought municipal bonds would be so exciting.

Taking a look at the municipal bond market it appears that there is a still a lot of fear priced into these issues.  Another way to look at this is to see which ETFs are carrying the largest price/NAV discount.  See below.

1) -14.82% Seligman Select (SEL) - largest holdings in AL, CA, NY, NJ, AK

2) -14.67 MBIA/Claymore Managed Duration Investment Grade (MZF) - largest holdings in CA, MO, CO
3) -14.16 Blackrock Florida Insured (MFL)

4) -14.05 Delaware Investments Arizona (VAZ)

5) -13.98 DTF Tax Free Income (DTF) - utilities/public works

6) -13.97 Nuveen New York (NUN) - 100% AAA

7) -13.93 Putnam Municipal Opportunities (PMO) - 20% hospitals

-13.78 Nuveen Florida Investment Quality (NQF) - 80% AAA

9) -13.69 Eaton Vance Michigan - 54% AAA

10) -13.67 Nuveen Florida Quality Income (NUF) - 75% AAA

Australia and New Zealand Banking Group Ltd (ANZ), Australia’s 3rd largest lender, noted it may see a $200 million write down thanks to its interest in a US bond insurer.  The bank shares are seeing a significant decline currently, faltering nearly 6 percent.  ANZs announcement further delineates the ripple effects of bond insurer uncertainty across the globe, not just in the United States and not just in municipal bonds.