In this context, I would just recall that monoliners activity was traditionally limited to guarantee US-municipal bond issues with low default probabilities that involve small capital cushions. However, extending their activities through insuring ABS structures coupled to current market conditions are putting pressure on their capital cushions.
In fact, the loss assumptions for the bucket of structured finance bonds wrapped by monolines, which are partly formed by US sub-prime mortgages and CDOs, have been revised sharply higher. Under these new assumptions, the excess capital of many monoliners is insufficient and requires fund injections to meet their capital requirements or avoid a downgrading.