Bond insurance drops 13.4% for Q1-Q3
The amount of bonds wrapped by insurance declined 13.4% year-over-year in the first nine months of 2026, despite another year of record supply.
Processing Content
The top two municipal bond insurers wrapped over $26.935 billion across 1,230 deals in the first three quarters of 2026, down from $33.363 billion in 1,364 deals in the same time frame in 2025, according to LSEG data.
BAM’s growth led it to overtake Assured as the top bond insurer during the first nine months of 2026, with BAM seeing $13.817 billion in par compared to Assured’s $13.118 billion, per LSEG.
BAM saw insurance rise 5.4%, while Assured saw a 54.7% decline year-over-year, the LSEG data shows. Assured noted it was active in markets LSEG doesn’t include in its calculations.
“BAM’s business is focused on the muni market, and our mission is to serve our issuer and investor stakeholders by consistently growing bigger and stronger over time,” said Mike Stanton, head of strategy and communications at the insurer.
“Assured keeps evaluating opportunities, emphasizing sound credit fundamentals and pricing that deliver appropriate risk-adjusted returns,” said Robert Tucker, senior managing director of investor relations and communications at Assured Guaranty.
“The company believes this disciplined underwriting approach supports the meaningful value our unconditional guaranty provides to issuers and investors,” he said.
BAM saw $13.817 billion, or a 51.3% market share, across 615 deals in the first three quarters of 2026. This compares to $13.066 billion, a 37% market share, across 662 deals in Q1-Q3 2025, LSEG data shows.
BAM’s new-issue par increase slightly outpaced the market overall, and the third quarter was its strongest in volume this year, Stanton said, noting utilization increased when volatility spiked in September and investors showed a preference for “high-quality, BAM-insured bonds.”
BAM’s claims-paying resources keep rising steadily each quarter, so as construction costs rise, BAM can work with issuers with larger nominal capital plans, Stanton said.
The average new-issue deal size increased 14% year-over-year, and BAM guaranteed over 30 deals of $100 million or more, he said.
Underwriters on larger deals also used BAM insurance on specific maturities, especially to broaden institutional demand for longer-dated term bonds, Stanton said.
Examples included: $337 million on an $866 million issue for San Antonio Airport, $303 million of the $563 million of subordinate bonds from the Aquarion Water Authority in Connecticut, $131 million of a $288 million sale of certificates of participation by the Polk County, Fla., School District and $126 million of a $782 million issue for the Nashville Convention Center, per Stanton.
Retail investor demand for munis has been a trend in 2026, and BAM has seen that reflected in its balanced secondary market business, where it has “executed more than a thousand individual trades already this year for both large institutional investors on smaller blocks of bonds that broker-dealers are re-offering to individual investors,” he said.
Meanwhile, “Assured Guaranty insured an aggregate of $16.2 billion of par during the first nine months of 2026, reflecting activity across the primary and secondary municipal markets, and the primary taxable corporate CUSIP market — which is not included in the data sourced from LSEG data,” Tucker said.
The $16.2 billion figure includes the LSEG’s $13.1 billion of primary municipal par sold across 615 deals for a 48.7% market share in Q1-Q3; $2 billion of primary market taxable corporate CUSIP par in the first nine months and an additional $1 billion of par in the secondary market, he said.
The $2 billion of primary market taxable corporate CUSIP par includes $1.5 billion of military housing revenue bonds issued for Hampton Roads PPV during the third quarter, and two transactions totaling $546 million insured earlier in the year), Tucker said.
After an exceptionally strong 2025 — when Assured’s insured par reached its highest level since 2020 — par activity in Q1-Q3 2026 returned to levels more consistent with those seen since 2020, Tucker said.
During the first nine months of 2026, “Assured guaranteed 23 transactions in which at least $100 million of its insurance was utilized, including six in the third quarter,” Tucker said.
Notable Q3 deals included the previously mentioned Hampton Roads military housing; $286 million in port revenue bonds for Anchorage, Alaska; and $288 million in revenue and revenue refunding bonds for Chicago O’Hare International Airport, he said.
In the first three quarters Assured insured $4.9 billion of par across 109 primary and secondary muni market transactions and primary taxable corporate CUSIP market deals involving double-A credits, Tucker said.
The continued use of Assured’s insurance on double-A credits shows the “company’s value proposition and the market’s recognition that its guaranty can add meaningful value even to highly rated bonds,” he said.
