Benefits for Municipal Bond Investors

At Assured Guaranty, we carefully select the municipal bonds eligible for our municipal bond insurance, and we back our judgment with our own capital. As a result, investors enjoy benefits that go beyond the basic default protection of our guaranties. Here are some of the key reasons to purchase municipal bonds we insure.

Payments when due: If the municipal issuer fails to make a scheduled payment when due for any reason, we are obligated to make prompt payment, thereby enabling the investor to receive consistent cash flow. Bear in mind that, while municipal bond defaults are rare, they occur more frequently in periods of economic stress (e.g., Jefferson County, AL; Harrisburg, PA).

Professional credit underwriting and due diligence: There are approximately 30,000 U.S. municipal bond issuers, some quite small, and a wide variety of municipal bond structures. Moreover, municipal financial reporting is not as timely or transparent as that of publicly traded companies. We have the resources to evaluate the unique risks of each bond issue and can often negotiate stronger terms and conditions for the municipal bonds we insure.

Surveillance and remediation: Assured Guaranty's surveillance specialists track every issuer for the life of its insured municipal bonds. In many cases, the guarantor can help resolve potential problems before they become serious.

Enhanced market liquidity: We have insurance in force on about 15% of the roughly $2.9 trillion of municipal bonds outstanding.* Although municipal bond insurance does not guarantee a particular market value, distressed issuers' bonds guaranteed by highly rated municipal bond insurance companies have historically held their trading value better than comparable uninsured issues.

For additional help deciding whether to purchase insured municipal bonds, see our FAQ for the retail market “Municipal Bond Insurance: The Basics” at THINKASSUREDGUARANTY.COM.

* Par outstanding as of December 31, 2010.