Municipal bond buyers are finding more ways to sleep well at night.
In the first half of 2025, a growing share of new issues came to market with a belt-and-suspenders appeal – solid credit quality paired with insurance, offering investors both strong fundamentals and an extra layer of protection.
During that six-month stretch, the amount of municipal debt backed by insurance climbed by 12.4% compared to the same period last year.
Together, the two leading bond insurers, Assured Guarantee and Build America Mutual, guaranteed $22.1 billion in issuance, up from $19.4 billion in early 2024, according to The Bond Buyer. The total was spread across 873 deals, an increase from 770 in the same period last year, a sign that more issuers are opting for insurance.
The insured share of total muni issuance reached about 7.9% from January through June of this year, consistent with the 7% to 8% range seen since 2021, according to the publication.
Added security
Assured Guaranty said it insured 64% of the insured par amount sold in the first half of 2025. During that time, it insured $14.1 billion in par value of new municipal issues, 30% more than in the same period last year and the highest first-half total it has reported in more than a decade.
In the second quarter alone, the company insured $9.5 billion, a 32% year-over-year increase, across 252 deals, a jump of 41%.
Assured also said it insured 54 already high-grade, AA-rated issues totaling $3.3 billion in the second quarter. Over the first half of 2025, it wrote more than 100 policies covering about $5 billion of such high-quality debt, underscoring that even well-rated bonds are benefiting from the added security of insurance.
BAM, with about 36% market share, insured approximately $8.0 billion across 400 deals. Of those, 27% were AA-rated.
Win for investors
The rise in insured issuance is a win for investors (“Muni Bond Insurance Rises, Delighting Investors, Issuers”) and also reflects growing strength among bond insurers.
“More insured bond volumes overall suggest better financial metrics for the companies themselves, plus improved liquidity for insured paper,” said Matt Fabian, of Municipal Market Analytics, according to the publication.
For investors, insured municipal bonds can offer a way to access lower-rated, though still investment-grade issuers while benefiting from the insurer’s typically AA or higher rating. That upgrade can make certain bonds appealing to more investors and improve pricing and liquidity.
Speak to a Muni Pro
You've enjoyed reading our insights, now speak with the pros to find the right bonds for you.
Bond insurance is seldom triggered but serves to reinforce confidence and expand opportunity. Even in an era of strong municipal credit quality, it can enhance liquidity, support stronger pricing and broaden the appeal of a bond to more buyers.
As the first half shows, more issuers are choosing that extra safeguard.
Just as a belt and suspenders work together to keep you secure, pairing strong underlying credit with bond insurance offers a double layer of assurance, one that is becoming more fashionable in today’s municipal bond market.