What is the credit quality of most of the underlying municipal bonds?
Monoline insurers typically insure only municipal bonds that are of investment-grade quality on their own. The underlying bonds may or may not be rated by a credit rating agency. A bond without a rating does not necessarily carry a higher level of risk; it simply means that the issuer did not apply for an underlying rating (a rating on the uninsured bond), possibly because it did not want to incur the additional cost.
