Build America Mutual will list indicative secondary-market insurance premium quotes on the site of MuniBrokers LLC, an online service aggregating bond offerings and bid-wanted lists from nine of the nation's largest interdealer bond brokerage firms.
"Bringing additional tools and information to users on our website is a continuing priority here at MuniBrokers," Jay Caldas, president of MuniBrokers, said in a news release Monday. "We've been linked to BAM credit profiles for all BAM-insured inventory since last year, and this update adds information about the availability and cost of adding a BAM guaranty to users' holdings or offerings, the obvious next step as the utilization of secondary market insurance to improve bonds' ratings and liquidity becomes more common."
According to the release, inventory that has been pre-approved for insurance by BAM's credit committee will be flagged on the site with a quote for the insurance, expressed in terms of dollars per bond, and the corresponding all-in yield calculated by MuniBrokers.
Users will call BAM's capital markets desk to confirm terms and execute the insurance transaction. BAM said that it insured $611 million of bonds in the secondary market in 2015, a 30% increase from 2014.
"Adding BAM's quotes to the MuniBrokers platform will streamline price discovery for traders who are already utilizing secondary market wraps as part of their strategies, and help others identify and evaluate situations where insurance adds value," said Scott Richbourg, BAM's head of public finance.
BAM credit profiles (previously known as obligor disclosure briefs) will continue to be available for all BAM-insured bonds listed on the site, the insurer said.
BAM said that municipal bond investors, traders, and sales professionals use the credit profiles to make their mandatory reviews of municipal credit quality faster and more efficient, while bond issuers - the public-sector entities that are BAM's members - benefit from increased transparency that can improve the liquidity of their insured and uninsured bonds. BAM publishes a credit profile for every issuer it insures, and updates them annually. To date, BAM has published more than 2,500 credit profiles, according to the company.
MuniBrokers provides software to interdealer brokers and a subscription web based trading system for their clients through MuniBrokers.com. Their connectivity, customer distribution network and intuitive systems enable MuniBrokers to offer an opportunity for market participants to enhance their business. MuniBrokers supports transactions in municipal, corporate, agency and U.S. treasury securities.
