Muni bond insurance industry – on the way back, sort of?

This short Reuters piece summarizes the status of the municipal bond insurance market, which froze up during the financial crisis and shrunk dramatically in its wake. Municipal bond insurance became much less common as a credit enhancement than it had been pre-2008, when it was often purchased by issuers in hopes of better ratings, interest rates and market acceptance for new issues than they would have garnered in their “natural” state. The ecology of the original small community of muni bond insurance firms changed as well in the pivotal period of turmoil, with several exiting and a few new ones springing up in recent years (though not all independently; MAC was established and is owned by Assured Guaranty (http://assuredguaranty.com/investor-information/by-company/mac) or more exactly by some of its parts (http://assuredguaranty.com/about-us/corporate-structure)). As the Reuters article explains, 2013 data suggest the muni insurance industry may be showing signs of a rebound, or at least, a slowed decline.

US municipal bond insurance’s contraction slowed in 2013 (Reuters)

http://www.reuters.com/article/2014/01/17/us-usa-municipals-insurance-idUSBREA0G1LJ20140117

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