U.S. Public Finance

Assured Guaranty is the leading provider of municipal bond insurance in the United States.

Our municipal credit enhancement products include:

  • Municipal bond insurance policies covering principal and interest, for both new issues and those already trading in the secondary market
  • Surety policies that take the place of cash-funded reserves in municipal bond transactions

We guarantee a wide range of municipal bond types supported either by tax revenues or revenues from essential public projects or services. We insure both tax-exempt and taxable municipal bonds.

While we have three platforms – AGM, insuring only public finance transactions; MAC, insuring only U.S. municipal bonds in select categories; and AGC, a diversified provider – we are one team, applying a uniform underwriting standard and dedicated to the highest level of customer service. In addition to our large municipal bond insurance department in our New York headquarters, we maintain a fully staffed western regional office in San Francisco.

Impact of COVID-19 (as of May 14, 2020)

In the market environment created by the pandemic, investors became more focused on liquidity, credit and rating quality. For example, between May 11 and May 14, 2020, bonds sold with Assured Guaranty insurance included approximately $400 million of par for the Dormitory Authority of the State of New York, rated Aa3/AA- by Moody’s and Fitch, respectively, as well as another $150 million of primary market par.  Assured Guaranty insured $4.26 billion of new issue par from January 1 to May 14, 2020.

We have also seen significantly stronger demand for our secondary market insurance. In the six weeks from April 1-May 9, we booked $309 million of secondary market par compared with $47 million for the same period during 2019.  We believe that the market disruption that COVID-19 caused has driven home to both investors and issuers the value of our guaranty and that this value should continue to be reflected in future results in both primary and secondary markets. 

U.S. municipalities reacted to their experience of the 2008 financial crisis by generally improving their operating and liquidity positions, which we believe even better prepared them to ride out the pause in economic activity. COVID-19 appeared after the longest recorded economic expansion, during which municipal governments’ tax receipts grew significantly, allowing them to improve their balance sheets and rainy-day funds. Having carefully reviewed our individual insured transactions in the sectors we think most likely to be affected by the pandemic’s economic impact, we do not currently expect permanent unrecoverable losses, or liquidity claims this year that we cannot easily manage.

Q1 2020 Results

Assured Guaranty garnered approximately 50% of insured new issue volume during the first quarter of 2020, including $162 million of corporate-CUSIP taxable bonds. Our total primary market par volume was up 22% from the first quarter of 2019 at approximately $2.5 billion of new issues sold across a broad spectrum of bond sectors, transaction sizes and deal structures. In total, Assured Guaranty insured $2.7 billion of par across the primary and secondary markets for the first quarter of 2020. Beyond  those public market transactions, Assured Guaranty also insured $76 million in private placements during the quarter. In addition to the $2.5 billion of primary market par we insured during the quarter, we were mandated on over $800 million of additional par where the pricing was postponed due to market conditions. Throughout the quarter, we remained disciplined in our credit selection and pricing, focusing on transactions that produce appropriate returns.

2019 Results

In 2019, Assured Guaranty continued to lead the industry in par insured, guaranteeing 60% of the insured new issue municipal volume sold during the year.  In total for the year, we guaranteed 840 tax-exempt and taxable new issues, with an aggregate insured par of $14.7 billion.* On each of 22 different transactions, we insured $100 million or more of par.  Included in the $14.7 billion total is $4.4 billion of insured par obtained through competitive bids, representing 64% of that market.  $1.5 billion in par of our new issue volume included underlying transactions rated in the AA category by S&P Global Ratings or Moody’s Investors Service.  Additionally, Assured Guaranty executed $1.3 billion of insured par on the secondary markets.

*Insured volume, number of transactions and market share information in this paragraph was calculated by Assured Guaranty based on information supplied by SDC Refinitiv, and includes a $700 million taxable health care transaction that may be excluded from third-party municipal data bases because it has a corporate CUSIP.

Forward-Looking Statements
Any forward-looking statements made on this page reflect Assured Guaranty’s current views with respect to future events and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. Assured Guaranty’s forward-looking statements, including but not limited to those related to the market for its credit protection products and to the financial health and resilience of the obligors underlying its insured portfolio, could be affected by the development, course and duration of the COVID-19 pandemic and the governmental and private actions taken in response (including governmental responses that could reduce demand for the Company’s credit protection products), and the global consequences of the pandemic and such actions, and other factors identified in Assured Guaranty’s filings with the Securities and Exchange Commission, which are available on its website, and other risks and uncertainties that have not been identified at this time. Readers are cautioned not to place undue reliance on these forward-looking statements, which are made as of May 15, 2020. Assured Guaranty does not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contact Information

  • William J. Hogan
  • Senior Managing Director
  • 212 408 6006
  • Email
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  • Christopher Chafizadeh
  • Senior Managing Director
  • 212 339 0832
  • 914 420 6530
  • Email

     

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