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Insured Bond |
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Insured bond A municipal bond backed both by the credit of the municipal issuer and by commercial insurance policies. Insured Bond A municipal bond on which payment is guaranteed by a bond insurance company, especially one with a high credit rating. An insured bond is doubly protected because it is guaranteed by both the revenues from the issuing municipality itself and by the bond insurer in case the issuer defaults. As such, an insured bond is very low risk, and therefore usually carries a lower coupon rate than an uninsured bond.
Insured bond. An insured bond is a municipal bond whose interest and principal payments are guaranteed by a triple-A rated bond insurer. Insurance protects municipal bondholders against default by the issuer and protects bonds in case they're downgraded by ratings agencies, which can decrease market value. Insured bonds generally offer a slightly lower rate of interest than uninsured bonds. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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