Water-borne polyurethane coating

[simonwei]

Dear all:

I've been bugged by a question: For preparation of water-borne polyurethane, why is it OK to disperse NCO-terminated polyurethane prepolymer into water? Doesn't NCO react readily with water?
For some cases NCO is blocked first, but in most cases unprotected NCO is exposed to water.
Is it because NCO is inside micelles?

Thanks in advance for your help.

simonwei