The bond insurance industry experienced a significant increase in the first quarter of 2024, with the two top municipal bond insurers expanding their market share. According to LSEG data, municipal bond insurance grew by 24.4% year-over-year, with a total of $7.132 billion in deals wrapped in the first quarter of 2024. This marked a substantial increase from the $5.735 billion of deals in the first quarter of 2023. The number of deals also saw a significant uptick, with 318 deals achieved in the first quarter of 2024, compared to 260 deals in Q1 2023. Insurance penetration for the quarter fell to 7.2%.
Assured Guaranty accounted for a total of $3.782 billion in 152 deals, representing a 53% market share in the first quarter of 2024. This was a slight decline from the 59.5% market share the company held in Q1 2023. Despite this, Assured insured $3.782 billion of new-issue par in Q1 2024, marking a 10.7% increase year-over-year. The firm’s success can be attributed to institutional investor demand for its insurance on larger transactions, according to Robert Tucker, senior managing director of investor relations and communications at Assured. Assured insured seven transactions with $100 million or more in insured par, totaling approximately $1.4 billion. The company also added value on double-A credits, insuring $605 million of par on 23 deals in the first quarter.
Build America Mutual (BAM) also showed significant growth in the first quarter of 2024, insuring $3.350 billion in 166 deals, representing a 47% market share. This marked an increase from the $2.320 billion insured in 136 deals in the first quarter of 2023. BAM’s par amount surged by 44.4% year-over-year, outpacing the overall market growth. Mike Stanton, head of strategy and communications at BAM, highlighted the success of the firm in securing more than a billion dollars from seven large transactions with par values of $100 million or more. BAM insured sales from 31 states, up from 20 in the first quarter of 2024, with 85% of insured par going towards new-money investments in various sectors.
The growth of both Assured and BAM has led to expansion within both firms. Assured recently promoted two employees, Marc Livolsi and Evan Boulukos, and hired a former Citi employee, Paige Litten, to enhance its new-issue and secondary market business. Livolsi and Boulukos bring over 20 years of experience in the muni market and have already contributed to the firm’s growth since their promotion. Melissa Gribble, with nearly 40 years of experience, has also been brought on board to expand Assured Guaranty’s reach within the Australian market. On the other hand, BAM welcomed John Miller, a veteran banker and advisor, as a senior advisor focused on expanding the firm’s use of bond insurance in the primary market for large infrastructure and public power projects.
The bond insurance industry has experienced substantial growth in the first quarter of 2024, with both Assured Guaranty and Build America Mutual expanding their market presence. The increased demand for bond insurance reflects a positive trend in the market, with opportunities for further growth and expansion on the horizon. With strategic hires and a focus on enhancing market presence, both firms are well-positioned to capitalize on the growing demand for bond insurance in the municipal market.