South Florida Arbitration & Litigation Lawyer Blog
Insured Municipal Bond – South Florida Municipal and Corporate Bond Investment Loss and Default FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
Insured Municipal Bonds are insured against default be a Municipal Bond Insurance company such as MBIA and AMBAC Indemnity Corporation. The insurance company pledges to make all of the interest and principal payments, as they become due, if the issuer of the bonds defaults on its payment obligations. In return, the bond’s issuer pays a premium to the insurance company. Insured bonds usually trade based on the credit rating of the insurer rather than the rating of the underlying issuer, since the insurance company is ultimately at risk for the repayment of principal and interest. Insured bonds usually pay slightly lower yields, because of the cost of the insurance than comparable non-insured bonds.
However, the market value of the bond, especially intermediate and long term bonds, is effected by interest rates in much the same manner as non-rated bonds.
Please keep in mind that this information is being provided for educational purposes only. It is not designed to be complete in all material respects. Thus, it should not be relied upon as legal or investment advice. If the reader has any questions concerning the contents of this post, you should consult a qualified professional.
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At the Fort Lauderdale Law Office of Russell L. Forkey, we represent clients throughout South and Central Florida, including Fort Lauderdale, West Palm Beach, Boca Raton, Sunrise, Plantation, Coral Springs, Deerfield Beach, Pompano Beach, Delray, Boynton Beach, Hollywood, Lake Worth, Royal Palm Beach, Manalapan, Jupiter, Gulf Stream, Wellington, Fort Pierce, Stuart, Palm City, Jupiter, Miami, Orlando, Maitland, Winter Park, Altamonte Springs, Lake Mary, Heathrow, Melbourne, Palm Bay, Cocoa Beach, Vero Beach, Daytona Beach, Deland, New Smyrna Beach, Ormand Beach, Broward County, Palm Beach County, Dade County, Orange County, Seminole County, Martin County, Brevard County, Indian River County, Volusia County and Monroe County, Florida. The law office of Russell L. Forkey also represents South American, Canadian and other foreign residents that do business with U.S. financial institutions, investment advisors, brokerage and precious metal firms.