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 two platforms – AGM, insuring only public finance transactions; 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 the large municipal bond insurance department in AGM/AGC’s New York headquarters, we maintain a fully staffed western regional office in San Francisco.

2022 Full-Year Results

In a market where yields surged higher by hundreds of basis points, causing issuance to contract by more than 20%, bond insurance and, more specifically, Assured Guaranty rose to the occasion to deliver value to a wide range of market participants. In no area was this displayed more prominently than new secondary market insurance on previously issued bonds. While always an important part of our business, this segment grew in significance this year as traders, investors and portfolio managers engaged with Assured Guaranty to produce record volume not seen in over a decade.

Assured Guaranty wrapped $3.3 billion of par across 364 secondary market transactions with over 30 firms. The surge in demand for our wrap on the secondary market is best illustrated when compared with the previous year’s volume of $437 million, demonstrating 650% annual growth. The product was particularly useful in giving investors market liquidity and portfolio management flexibility on lower coupon bonds as rates surged higher and bond prices fell.

While secondary market activity led the headlines for the year, primary market activity remains the cornerstone of our efforts to deliver savings to municipal issuers. The shift towards greater demand for insurance, which first occurred during the pandemic, was well‐maintained in 2022 as insured penetration remained at the 8% level for the third year in a row.  In the fourth quarter of 2022, the penetration rate reached 8.7% - the industry’s highest fourth quarter penetration rate since 2008.  

Assured Guaranty continued to lead the bond insurance market in 2022. Finishing the year with a 70% share of primary market insured par sold in the fourth quarter, Assured Guaranty’s 2022 market share was close to 60%, based on $17.1 billion of new issue insured par from nearly 650 tax-exempt and taxable new issues, including $4.1 billion in the fourth quarter. The transactions represented a broad spectrum of bond sectors, transaction sizes and deal structures, including public-private partnerships. Also, during the year, we guaranteed 31 transactions that each utilized over $100 million of Assured Guaranty insurance, including four where we insured more than $500 million.  

In aggregate for 2022, Assured Guaranty insured $20.4 billion of primary and secondary market insured par, including $2.7 billion from 121 transactions with underlying ratings of AA by S&P and/or Aa by Moody’s. With higher rates and widening spreads, Assured Guaranty’s value proposition and our ability to provide spread savings to issuers came into focus. 

2021 Results

During 2021, total market volume utilizing bond insurance increased to 8.2% of par issued, the highest rate over the past 12 years and up from 7.6% during 2020 and 5.9% during 2019. 

Assured Guaranty’s production was the leading force behind the 57% growth in annual insured par issued since 2019, as we insured approximately 59% of insured par in 2020 and 61% in 2021, which was our highest market share since 2013. Our $23.1 billion of insured new issue volume in 2021 (including $462 million from municipal bonds with corporate CUSIPs), was $2.6 billion more par than we insured in 2020 and reflected 1,078 individual transactions.  

During fourth quarter 2021, Assured Guaranty insured 250 transactions with insured par of $5.2 billion, garnering 61% of insured par issued.  

An important trend in recent years has been the growing use of our guaranty to help launch some of the market’s largest transactions. We provided $100 million or more of bond insurance for each of 48 large issues brought to market in 2021, up from 39 transactions in 2020 and 22 in 2019.  Among our larger transactions in 2021 were three that were honored as Deals of the Year in their respective categories by The Bond Buyer. These included the overall winning Deal of the Year, Miami-Dade County’s Seaport revenue refunding issue, and the Far West Region and Health Care Financing Deals of the Year, each of which carried an underlying rating in the “A” category from one or more rating agencies. 

In addition to the large issues we guaranteed in 2021, we also provided bond insurance for hundreds of smaller issues, including 450 small enough to be bank qualified. We delivered value for both large and small transactions, negotiated transactions, and competitive-bid transactions in many market segments and across a wide ratings spectrum. Significantly, we continued to add value on credits with underlying ratings of AA by S&P and/or Aa by Moody’s, insuring 109 transactions totaling $3.53 billion of insured par in this category during 2021. 

2020 Results

The financial uncertainty brought on by the COVID-19 pandemic caused a renewed interest in the value provided by our product in the U.S. public finance market.  Industry insured penetration, which had remained below 6.0% for the past several years, increased to 7.6% of par on the year, with some months exceeding 9%.  Assured Guaranty, as the leader in the industry, insured 58% of the insured volume, guaranteeing $20 billion of primary-market volume across nearly 1,000 transactions.

During 2020, Assured Guaranty provided insurance on $100 million or more of par on 39 transactions, up from 22 such transactions in the prior year. In our largest 2020 transaction, we insured $726 million of par for Yankee Stadium LLC.

In the case of AA credits (defined as those credits that have a double-A category rating from S&P or Moody’s on an uninsured basis), Assured Guaranty insured a total par of $2.5 billion in 2020, which is $1 billion more than we insured last year in this category. 

Our production in healthcare finance was strong, as we guaranteed $2.7 billion of primary-market par on 25 tax-exempt, municipal taxable, and corporate CUSIP transactions with underlying ratings in the single-A and triple-B categories. As the only provider of bond insurance for healthcare revenue bonds, Assured Guaranty wrapped 9.7% of all healthcare revenue bonds issued during 2020, regardless of underlying ratings.  Additionally, we guaranteed $464 million of healthcare par across 39 different secondary-market policies. 

Notably, for the first time in seven years, we insured financings for private higher education institutions, including two for Howard University totaling $321 million in insured par.

Also in the primary market, we insured $6.8 billion of par on taxable municipal bonds, up from $3 billion in 2019 and $1.5 billion in 2018. The increase reflected growing appreciation of our guaranty among U.S. taxable investors and non-U.S. investors.

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 January 12, 2023. 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.