Benefits for Municipal Bond Issuers

Issuing new bonds with our municipal bond insurance benefits bond issuers in a number of ways.

Reduced cost of funds:  Bond insurance is designed to save issuers money.  For appropriate credits, municipal bonds issued with insurance trade at lower yields than they would if not insured.  The bond insurance premium absorbs some of the spread; the issuer keeps the rest.

Market access: Especially in times of widespread budget uncertainty, smaller or less well-known issuers may find it difficult to launch bond issues at any price.  Municipal bond insurance can often overcome that hurdle, providing not only financial backing but promoting improved perception of the underlying credit.

An experienced, creative negotiating partner:  We bring broad experience insuring both tax-exempt and taxable municipal bond issues, allowing us to adjust bond insurance terms and conditions to meet not only our own needs but also those of issuers and the market.  This may be especially important in complex transactions, including public-private partnership structures now being introduced to the United States.

Single point of contact:  Our surveillance department’s ability to spot signs of credit trouble early can help issuers as well as investors.  If we see a potential problem, we will work constructively with the issuer to head it off, and we may have more flexibility than a bond trustee to waive covenants or take other steps to set a transaction back on the right path.  From the issuer’s point of view, there is only one “investor” to deal with for the life of the transaction.

 

Starting the Process

If you are an issuer or financial advisor with a negotiated or competitive transaction you would like us to consider for insurance, please provide the following documents to us no later than seven business days prior to the sale date:

  • Preliminary Official Statement
  • The last three years of audited financials of the issuer
  • Any other material documentation

 

Send electronic copies to: procurement@agltd.com

 

Need more information?

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