We welcome Robert Barnes and Donald Hunt’s commentary [published Sept. 28] and general support for a municipal bond insurer similar to our recently proposed Issuers Mutual Bond Assurance Co. However, we feel compelled to clarify several misconceptions they expressed about the plan.
First, it is misleading to suggest that IMBAC will not perform research on the bonds we insure. The company will have full research and analysis services to fully assess each issue that comes before it.
Secondly, they incorrectly assert that IMBAC will insure nonprofit bonds in addition to municipal issuers. There is nothing in our business plan (publicly available at nlc.org) for insuring nonprofit bonds.
Also, to clarify so there is no confusion: our proposal would insure the issues and not the issuers themselves.
Finally, I believe I should mention that the IMBAC proposal would not exclude any private entity from participating as a bond insurer, nor prevent cities from shopping among insurers for the best deal.
Cities continue to have difficulty in gaining access to the credit markets. Given the continuing financial difficulties in the economy and in cities specifically, it is imperative that cities be given a mechanism to access the funds they need to respond effectively to the current fiscal crisis.
Donald J. Borut
National League of Cities