Determinants of Private Sector Insurance Premiums on Municipal Debt Issues
This paper examines the pricing of municipal bond
insurance—insurance generally paid for by the issuer that guarantees payment of
principal and interest on newly issued bonds.
In particular, it focuses on the factors that cause the premiums to vary
from one municipality to another and from one bond issue to another. This study
utilizes a unique municipal bond database that includes the insurance premium
paid by issuers of municipal debt obligations in