Investor demand for bond insurance remained strong in the first three quarters of 2024, as the amount of debt attached to bond insurance increased by 26.8% year over year.
Municipal bond insurers wrote $28,921 million in policies in the first three quarters of 2024, up from $22,814 million in policies in the first three quarters of 2023, according to LSEG data.
Industry par value was achieved in 1,217 transactions compared to 995 transactions in Q1-Q3 2023.
Both insurance companies achieved year-over-year growth. Assured and BAM bond insurance increased by 16.2% and 44.5% respectively.
According to LSEG data, Assured Guaranty accounted for 561 deals totaling $16.599 billion, accounting for 57.4% of the market share, compared to 464 deals totaling $142 in the first nine months of 2023. 89 million dollars, accounting for 62.6% of the market share.
This is the second largest primary market value guaranteed by Assured Guaranty in the first three quarters of the past 10 years, according to Robert Tucker, Assured Guaranty’s senior managing director of investor relations and communications. It is said to be a high amount.
In the first three quarters of this year, 33 Assured insurers insured $100 million in face value, led by $1.1 billion in insurance for the Florida Passenger Rail Brightline project and $800 million in insurance for John F. Kennedy Airport’s new Terminal 1. We are conducting more than one transaction. He said $831 million was spent on revenue bond issues for New York state school district dormitory authorities.
The company also increased insurance coverage for Moody’s and S&P AA credits, Mr. Tucker said.
“This year, the uptake of our insurance within AA credits has also increased year-on-year, with policy numbers up 16% and average policies up 25% in the first nine months, with a total of 74 policies. (20 of them were during the third quarter, with face value of approximately $3.5 billion),” Tucker said.
Meanwhile, Build America Mutual insured $12.322 billion (42.6% market share) in 656 deals. That’s up from 531 deals and $8.525 billion, or 37.4% market share, in the first three quarters of last year, according to LSEG data.
Michael Stanton, director of communications and spokesperson for Build America Mutual, said BAM’s $12.322 billion primary market total in the first nine months of this year exceeds the total par value for all of 2023. Ta.
The company insured 23 new issue sales with a face value of $100 million or more in the first nine months of 2024, compared with 18 in all of 2023. Additionally, “we see underwriters using partial insurance on large transactions to capture specific demand, such as:” Georgia Municipal Power Authority’s $95 million policy was “It was part of a larger sale,” he said.
BAM also insured $2.8 billion in municipal bonds with official underlying ratings of double A or higher from Moody’s and S&P, Stanton said.
The growth of both companies was predicated on strong demand and interest, especially from institutions.
“We benefited from overall issuance growth and strong investor demand for our insurance, including institutional investors for some of our very large infrastructure transactions,” Tucker said.
The company continues to offer “meaningful funding cost reductions for issuers and additional protection for investors in a time of geopolitical uncertainty and increasingly unpredictable environmental conditions,” he said. .
Meanwhile, BAM has seen “strong demand from a wide range of investors for insurance with a diverse mix of credits, which has led to a very strong performance,” Mr Stanton said.
He said strong institutional investor interest continues to drive the use of insurance in larger, higher-quality transactions.
Mr. Tucker said that bond insurance “helps issuers save on borrowing costs, provides investors with protection and security in the event of unforeseen events, and provides strong market liquidity and You also get other benefits from our warranty, such as market value support.”
