WHO INSURES MUNICIPAL BONDS?

The majority of municipal bonds are insured by several large financial guaranty agencies. The world's largest insurer of municipal bonds is the Municipal Bond Insurance Association. (MBIA). MBIA provides financial guarantee insurance, investment management services, and other municipal services to the public, private, and not-for-profit sectors.

Another one of the largest municipal bond insurers is the American Municipal Bond Assurance Corporation (AMBAC). AMBAC insures municipal and structured finance debts and is the successor of the oldest municipal bond insurance company, which wrote the first municipal bond insurance policy in 1971. AMBAC became a subsidiary of Citibank in 1985 and went public in 1991. In 1995, AMBAC and MBIA started an international joint venture called MBIA-AMBAC International.

Since 1984, the Financial Guaranty Insurance Company (FGIC) has insured more than 13,500 municipal bonds. The FGIC also provides public entities with services such as liquidity facilities and investment products.

Governments can also get their bonds insured by a wide variety of smaller financial guaranty agencies.