Insured municipal bonds may offer added security for investors

If an issuer defaults, insurance firms can make sure your payments don’t stop

Greg RawlsPuerto Rico’s recent history of municipal bond defaults has highlighted the potential benefits of a niche part of the municipal (muni) bond market — insured municipal bonds. Insured munis have accounted for only around 6% of all municipal issuances in the past three years,but we believe they can play a role for investors who want assurance that their bonds’ interest and principal will be paid on time — even if the issuer defaults.

What are insured muni bonds?