Deals wrapped by insurance rose slightly in 2025 as demand for bond insurance remained strong.
Municipal bond insurance volume rose 4% in 2025 year-over-year, according to LSEG data.
The top two municipal bond insurers wrapped over $42.828 billion in 2025, up slightly from $41.166 billion in 2024, the data shows.
The industry par amount was achieved in 1,810 deals, up from 1,685 deals a year ago.
The municipal market saw a second consecutive year of record issuance in 2025, with bond insurance continuing to see strong demand, said Robert Tucker, senior managing director of investor relations and communications at Assured Guaranty.
"We attribute our continued success and leadership in the bond insurance market to our unique value proposition," Tucker said. "We believe that our insurance can broaden market distribution and attract diverse investors for large and small transactions alike. For investors, it provides safety and security."
Meanwhile, municipal issuers emerged last year as "the primary source of funding for essential infrastructure improvements nationwide and more of them utilized BAM to help facilitate their financings than ever before," said Mike Stanton, head of strategy and communication at BAM.
Assured Guaranty accounted for a total of $25.031 billion in 908 deals — a 15-year high — for a 58.4% market share in 2025, up from $24.059 billion in 792 deals for a 58.4% market share in 2024.
Overall, Assured insured a total of $27 billion in the new-issue and secondary market insured par, up 11% from 2024, Tucker said.
"Strong market demand on larger transactions showed continuing institutional appetite for our guarantee on such transactions," he said.
In 2025, Assured Guaranty wrapped 51 deals with at least $100 million or more in insured par for a total of about $12.6 billion in insured par, the largest number of these deals in over a decade, Tucker said.
Some of our larger deals included $1 billion for the Dormitory Authority of the State of New York; $844 million for the Downtown Revitalization Public Infrastructure District in Utah; $730 million for the Alabama Highway Authority; $650 million for the Beth Israel Lahey Health through the Massachusetts Development Finance Agency; and $600 million for the New York Transportation Development Corp.'s New Terminal One at JFK Airport.
The firm also saw an increase in the use of its insurance among AA credits, he said.
Including both the primary and secondary markets, year-over-year, Assured insured 58% more of such policies, representing approximately 60% more par, for a total of 163 policies and approximately $7 billion of insured par, Tucker said.
In the fourth quarter of 2025, Assured's primary and secondary market insured par sold totaled $5.2 billion. The par of its 206 primary transactions was $4.734 billion, which included 11 deals of at least $100 million. The firm's 191 secondary transactions in the fourth quarter represented $535 million of par, Tucker said.
Meanwhile, BAM insured $17.798 billion, or a 41.6% market share, in 902 deals in 2025, compared to $17.107 billion across 893 deals in 2024, or a 41.6% market share, according to LSEG.
BAM set a record for par insured and over 85% of that activity was for new-money investments, Stanton said.
"Investor demand for BAM-insured bonds was broad-based across sectors and regions, and grew stronger in [the fourth quarter], as total volume surged toward an all-time high and average transaction size increased," he said.
Insurance is a "valuable tool: on larger deals, because adding the BAM-wrap on certain maturities "allows underwriters to attract additional institutional accounts and allocate bonds to multiple strategies overseen by a single institutional manager," Stanton said.
Examples included $225 million of BAM-insured general airport revenue bonds as part of a larger $1 billion issue for Chicago O'Hare International Airport, and $204 million of water revenue bonds as part of a $976 million sale by the Los Angeles Department of Water and Power, he said.
There was also increased utilization by [separately managed accounts] and direct retail clients. They are "increasing their allocations to the tax-exempt market and are more likely to hold to maturity: They particularly value BAM's unconditional guaranty that they will receive every scheduled principal and interest payment," Stanton said.
BAM saw significant growth in revenue bond sectors, such as public power at $1.5 billion, up 91% year-over-year, and airports at $574 million, up 458% year-over-year, Stanton said. Additional notable deals in the fourth quarter included a $158 million student housing bonds for the University of Akron, Ohio, and the University of Mississippi at $112 million, as well as BAM's largest-ever deal in Montana; $130 million for High School District No. 1 in Helena, he said.
