WASHINGTON - The National League of Cities is seeking $5 billion in seed money from the Treasury Department to establish an issuer-run mutual bond insurance company, according to a draft business plan NLC plans to release today.

The issuer-owned mutual insurance company - which will seek to fill the gap left by the 15 commercial municipal bond insurers that were downgraded in the last two years - would insure investment-grade general obligation and revenue bonds "for essential municipal services," the business plan said.

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