25% more than the yield on other insured bonds
, says Mousseau.
While insured bonds
accounted for more than half of the market in 2005, just 4 percent of muni issues were insured in the first half of 2012.
However, Haugh (2006) notes that the rise in insured bonds
stems not from relaxing of credit quality standards by the bond insurers, but from the financial and operational improvement of hospitals that met the credit standards of the bond insurers.
Bond insurance is an insurance policy that guarantees the timely payment of scheduled principal and interest over the life of the insured bonds
The new policy offers issuers the ability to achieve higher foreign currency ratings from ratings agencies on the insured bonds
One alternative involves placing the money into AAA-rated insured bonds
producing tax-exempt interest of 7%, while the other alternative is the purchase of GNMA bonds producing taxable interest of 9.
The safest municipals are insured bonds
, those backed by one of several AAA-rated insurance companies.
To avoid being a victim, look for insured bonds
, backed by one of several AAA-rated insurance companies, such as Ambac Indemnity Corp.
In essence, Hsueh and Liu test for a yield differential between insured bonds
rated Moody's single A and insured bonds
rated Moody's Baa from 1981 and 1983.
Bondholders are also encouraged to send their contact information, together with the name of the issuer, CUSIP number, original par, series and other identifying information concerning the insured bonds
, to CIFG at novationteam@cifg.
The research compared AAA/Aaa-rated insured bonds
to AA/Aa bonds without insurance.
If you are looking for security, consider insured bonds
, which are backed by several AAA-rated insurance companies.