Assured Guaranty continues to step up its insurance of secondary market municipal bonds as part of the company's 2025 overall strategy, executives said Friday during a second quarter earnings call.
Assured president and CEO Dominic Frederico also said during the call that he was optimistic about President Trump's decision this week to
Assured wrote nearly $900 million of secondary market policies in the first half of the year, including over $500 million in the second quarter, Frederico said. The first quarter's secondary par amount was 150% of the total amount of secondary par Assured wrapped in all of 2024.
"One of our strategic priorities in 2025 was to increase our production in insuring U.S. municipal bonds in the secondary market," Frederico said, adding that the insurer receives "significantly higher premiums on our secondary market policies."
On the primary market, Assured insured 64% of the insured par sold during the first half of 2025, insuring $14.1 billion of new issue par sold, 30% more than during the same period last year, said Assured's chief operating officer Robert Bailenson.
"Looking at the third quarter, we are off to a good start, insuring approximately $2.8 billion in par closed in the month of July," Bailenson said, which includes $600 million for the New Terminal One at New York's JFK Airport.
Bond insurance penetration was at 7.9% for the first half of 2025, in line with the 7% to 8% range seen since 2021 for all bonds, according to Municipal Market Analytics.
When asked during the question-and-answer section if Trump's removal of the Puerto Rico oversight board would slow the debt restructuring, Frederico said he didn't think so.
"Nothing could delay a restructuring or a consensual deal [more] than the existing board was doing in terms of their execution," he said, adding that the insurer had previously agreed to three deals that "they had reneged on every time."
"It couldn't go any slower, so any change on that has got to be an improvement," he said. "At the end of the day, I'm optimistic that this sort of turns out to be a positive, not a negative."
Frederico said it remains to be seen how the board is reconstituted or if the dismissals are contested. "But as I said, to me, it can only improve. It can't go in an adverse way. So I think there's potential."
The firm was also asked about its internal downgrade of
"We saw the liquidity was not where we like our standards," said chief financial officer Benjamin Rosenblum.
"Additionally, when you look at what's coming out of Washington, there may be some headwinds from Medicaid and Medicare patients out there," Rosenblum said. "We do not believe this is going to be a big problem," he added. "We generally have a very positive view on the turnaround possibilities there, and we're looking forward to working with them to turn it around."
While Assured did not talk specifically about Brightline Florida, Frederico mentioned the credit as an example of how Assured calculates its exposure to below investment-grade credits.
"So if you look at a Brightline, we're the top tier of the .... capital stack. The ability to get to us in terms of a loss situation is pretty remote," he said. "But once the underlying credit has trouble making cash flow or making operating expenses, you downgrade the stack but the stack is protected at the top very, very well."
