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April 13 (Reuters) - The amount of U.S. municipal debt covered by insurance rose in the first quarter of 2012, but continued to be a small part of the new issue market, according to Thomson Reuters data on Friday.
Assured Guaranty Municipal Corp, the market's sole insurer, secured just $3.6 billion of the $78.9 billion of muni debt sold in the first three months of 2012. That was an increase of nearly 114 percent from the first quarter of 2011 and 8.6 percent higher than in last year's fourth quarter.
Insured bonds, which accounted for 57.3 percent of issuance in the $3.7 trillion debt market for states, cities and others in 2005, sank to just 5.5 percent of issuance in 2011 after last decade's financial crisis stripped insurers of their coveted triple-A ratings and drove some out of the business.
Letters of credit backed $558 million of debt in 10 deals in the last quarter, up nearly 22 percent from the same period in 2011, but down 85 percent over the last quarter of 2011. US Bancorp was the top provider, accounting for $413 million of the total, Thomson Reuters reported.
Bank of America ranked a far second, followed by PNC Bank NA.
Orrick Herrington & Sutcliffe, last year's top bond counsel, continued to dominate in the first quarter with 93 deals totaling $7.4 billion. Nixon Peabody ranked second with 17 deals totaling $3.9 billion.