Bond insurance

COVID-19 has put large burdens on state and local coffers and new business for the municipal bond insurers, generally, has increased.

Build America Mutual's underwriting and risk-management guidelines have an insured portfolio that does not reflect the overall U.S. municipal market and may perform better in a stressful economic scenario, S&P said.

So far this year, the bond insurance industry is on a better pace than it was last year. As of May 9, both Assured Guaranty and Build America Mutual have accounted for $7.30 billion in 563 deals, up from the $5.99 billion spanning 490 transactions as of May 9, 2019.

Assured Guaranty and BAM, the two active muni bond insurers, released statements Monday saying they are prepared and able to manage impacts of COVID-19.

The two active municipal bond insurers insured $5 billion more in 2019 than they did in 2018 thanks to a surge of issuance in the fourth quarter.

The two active municipal bond insurers insured $5 billion more in 2019 than they did in 2018 thanks to a surge of issuance in the fourth quarter. Assured Guaranty and Build America Mutual combined for $23.92 billion of insured volume spanning 1,724 transactions and 5.67% penetration rate in 2019. That is up from $18.92 billion in 1,249 deals and 5.58% insured rate in 2018.

Build America Mutual has hired Dan Bingham, who will join BAM’s capital markets team in the newly created role of head of institutional markets.

The bond insurer may be seeking a more receptive audience for its claim that underwriters provided incomplete and misleading information about the bonds it insured.

The two active municipal bond insurers benefited from the issuance boom in the third quarter, as the industry penetration rate rose slightly despite the fact that interest rates are going back down.

Vice President, Build America Mutual