As reported by The Vanguard Group, there has been a significant slump in muni bond ratings in recent years. As recent as 2003, 60% of all municipals had AAA ratings. However, as of September 30, 2009, AAA bonds were down to only 12% of the market.
The primary reason for the shift has been the financial woes of bond insurers. The difficult financial environment is a secondary reason for the slump in ratings. The significant changes in the municipal bond market over the past several years point to the need for portfolio diversification and professional management. Click here for Vanguard's article.