Bond Insures and their effects on Municipalities

[mino2126_IHB]

I was just curious to know what effects that the bond insurers like Ambac and MBIA are going to have on Mello-Roos, if any, on a forward going basis. My understanding of Mello-Roos is that it is a bond that is created to put in place the infrastructure needed to support new residential developments...however I am unaware of who originates the bond, municipality or builder?





The reason that I ask is that if the bond insurers end up getting their credit ratings cut or worse become insolvent it could further hamper the development of new sites or create a situation where Mello-Roos are increased to make up for the increase in financing the infrastructure...thoughts?

 

[IrvineRenter_IHB]

CFDs are generally formed by the developer who takes the bond money.





Your concern about the cost of CFDs increasing and its subsequent effect on new development is very real.

 

[mino2126_IHB]

I wonder why this is not getting as much attention as it should? Awhile ago we made some speculative comments about municipalities and states running deficits because tax revenue would not be coming in as expected. This might be the next hot button unless Buffet comes in and really makes his mark.