They found lower yields for insured bonds after the AHERF default but they also found a wider spread between the insured and uninsured bond
yields and a lower proportion of insured bonds.
The most significant benefit of bond insurance is interest savings--the "spread" between an insured and an uninsured bond
It also sees the government as ready to bailout senior bondholders in Credit Suisse and UBS but heavily downgrades ratings on subordinate debt on the assumption that, should the banks in Zurich get in trouble again, Geneva might take the radical Marxist action of letting investors in highly speculative uninsured bonds
actually experience some capitalism.
In the variable rate demand market, there is still demand for uninsured bonds
or bonds not tied to weak bond insurers, but only time will tell how this market will react to the newly strengthened bond insurers.