About Municipal Bonds
Does Bond Insurance Protect Market Value?
Insured bonds historically have retained more of their market value than comparable uninsured bonds in difficult economic times. In particular, bonds of issuers that have been downgraded or have experienced fiscal problems perform better if insured.
However, the presence of an insurance policy alone does not guarantee a municipal bond’s price in the secondary market. As with any other security, the actual bid price is determined by the market at the time of resale. Bonds sold prior to maturity may be worth more or less than their original cost.
All information and opinions contained in this publication were produced by the Securities Industry and Financial Markets Association from our membership and other sources believed by the Association to be accurate and reliable. By providing this general information, the Securities Industry and Financial Markets Association makes neither a recommendation as to the appropriateness of investing in fixed-income securities nor is it providing any specific investment advice for any particular investor. Due to rapidly changing market conditions and the complexity of investment decisions, supplemental information and sources may be required to make informed investment decisions.