Municipal bonds that are covered by an insurance policy that will pay all interest and principal due should the issuer default. Major insurers include MBIAC, AMBAC, and FGIC.
These are bonds that, in addition to being secured by the issuer's revenues, are also backed by insurance policies written by commercial casualty insurance companies. The insurance, usually structured as a surety insurance policy, provides prompt payment to the bondholders if a default should occur.
Bonds in which the principal and interest are insured by an insurance company. Either the issuer or the dealer can have the bonds insured.
Generally, municipal bonds that are covered by insurance against default (loss of interest or principal). The insurance premium is paid by the issuer. Insured bonds generally have a lower yield because of this protection.
Some municipal bonds are insured as to principal and interest by large bond insurance firms. The insurance firms are generally large with considerable financial strength. Therefore, any bond that is insured by one of the major insurers will carry a top credit rating from the major rating services, regardless of the issuer's credit strength.
Municipal bonds which are covered by a insurance policy which pledges that should the issuer fail to make a payment, the insurance company will pay all interest and principal due. Major insurers include MBIAC, AMBAC, FGIC, and BIGI.
