Bond insurance executives yesterday argued that their product should still have a role in the future of the municipal market, saying it provides value beyond just the guaranteeing of interest and principal payments in the event of default.

Executives from Financial Security Assurance Inc. and Ambac Assurance Corp.'s Everspan Financial Guarantee Corp. told market participants gathered at the Securities Industry and Financial Market Association's Municipal Bond Summit in New York that bond insurance also helps create enhanced liquidity for bonds and adds credit surveillance, among other benefits. They say that it will still make sense for smaller, lesser-known issuers and lower-rated credits to purchase bond insurance in the future.

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