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Bond Insurer Competition and the Likelihood of Texas Bonds Being Insured  

Author:  Earl D. Benson.; Barry R. Marks.

Source: Volume 41, Number 04, Winter 2021 , pp.23-48(26)

Municipal Finance Journal

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The purpose of this article is to examine the changes that took place in the Texas municipal bond insurance market from the fall of 2010 through the summer of 2016. The study analyzes bonds with credit ratings of A1/A+ through Baa3/BBB–. These bonds could receive a credit enhancement through the purchase of insurance during the study period. The findings suggest that the probability of being insured is dependent upon characteristics of the bond issue, market conditions, characteristics of the bond issuer, the S&P rating of the insured bonds, and bond insurance competition. These findings differ from an earlier study of insured municipal bonds over the period from 1989 to 1992.

Keywords: Municipal bond market, bond insurance, bond rating, Texas bond insurance, bond insurance competition

Affiliations:  1: Western Washington University; 2: University of Houston-Clear Lake.

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