Purchasing Credit Enhancement: How to Decide If Bond Insurance Makes Sense
Bond insurance can provide important benefits to issuers of tax-exempt bonds. For many issuers, the important reason to purchase bond insurance is to obtain lower borrowing costs. This booklet describes the calculations involved in determining the cost effectiveness of insuring a bond issue. Factors otherthan cost savings — including insurer requirements, municipal market reception, ability to purchase insurance in the future, and policy issues — are also covered.