Bond insurance usage rises nearly 5% in Q1

The amount of bonds wrapped by insurance in the first quarter grew 4.9% year-over-year amid strong supply.

The top two municipal bond insurers wrapped over $7.704 billion in the first quarter of 2026, up from $7.342 billion in Q1 2025, according to LSEG data.

The industry par amount was achieved in 350 deals, down from 384 deals a year ago.

Assured Guaranty (AGO) saw insurance fall 11.9%, while BAM saw 34% growth in par amount year-over-year.

Despite the year-over-year decline, Assured led the muni insurance market, though the gap between the two bond insurers narrowed.

Assured accounted for $4.093 billion in 180 deals for a 53.1% market share in the first quarter of 2026, down from $4.649 billion in 222 deals for a 63.3% market share in 2025.

Overall, the firm insured over $4.3 billion of par in the quarter, inclusive of secondary, said Robert Tucker, senior managing director of investor relations and communications at Assured Guaranty (AGO).

During the quarter, Assured "remained selective in underwriting, with a focus on credit, pricing and appropriate returns, and we are confident of value that an Assured Guaranty (AGO) policy delivers to both issuers and investors," he said.

"Our guaranty has been instrumental in supporting large transactions within the municipal bond market, highlighting the institutional demand for our guaranty," he added.

This interest shows institutions see the benefits the firm's insurance provides, including greater price stability and improved market liquidity, according to Tucker.

Due to investor demand for Assured's insurance, issuers of all sizes "enjoy reduced borrowing costs or greater borrowing capacity, illustrating the substantial value our guaranty contributes to their overall financial planning," he said.

The insurer wrapped nine deals with insured par over $100 million in the first quarter. This includes $636 million of hotel occupancy tax and special revenue and refunding bonds from the Houston Convention and Entertainment Facilities Department, $444 million in a privately placed bond issue, $243 million of Hartford HealthCare issue revenue bonds from the Connecticut Health and Educational Facilities Authority and $102 million of taxable bonds (with a corporate CUSIP) from Brown University Health, Tucker said.

Among double-A credits during Q1, Assured insured 28 primary and secondary transactions for a total of $662 million in insured par, highlighting "the market's acknowledgment of the value our guaranty provides even to highly rated credits," he said.

Meanwhile, demand for BAM insurance began strong this year and continued to build throughout the first quarter, particularly in response to increasing market volatility in March, said Mike Stanton, head of strategy and communication at the insurer.

BAM insured $3.61 billion, or a 46.9% market share, in 170 deals in the first quarter of 2026, compared to $2.694 billion across 162 deals in Q1 2025, or a 36.7% market share, according to LSEG.

This firm also set a record for secondary market trades executed in a quarter, Stanton said.

"Utilization was widely diversified across the country, and 77% of the par was for new-money investments. [Thirty-five] separate underwriters senior managed BAM-insured new issue," he said.

Higher education borrowers were active users of insurance, as shown by BAM's largest deal of the quarter, $150 million for the University of New Hampshire, along with $139 million for UC Law San Francisco, Stanton said.

Other notable deals included $146 million for the Oakland Unified School District, California; $87.5 million for Finney County, Kansas; and $86.5 million for the Eagle River Water and Sanitation District in Colorado, he said.

Overall, 30% of BAM's insured par was for K-12 education, 17% for city and county projects and 16% for water and sewer utilities, per Stanton.