Securities Law News

Muni Default Fears Spur Biggest Use of Bond Insurance Since 2009

Jan. 4, 2021, 6:46 PM

The coronavirus pandemic has driven the use of municipal-bond insurance to its highest level in more than a decade as borrowers seek to reassure investors concerned about a rise in defaults.

More than $34 billion of state and local government bonds sold in 2020 were insured, accounting for about 7.5% of new issues, according to data compiled by Bloomberg. That is the highest volume and share of sales since 2009.

The uptick marks a small if notable resurgence for a business that shriveled after the credit crisis set off by the housing market collapse, when the major insurers had their...

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