The amount of insured municipal bonds continued to drop in the first nine months of 2013, down nearly 18 percent to $8.2 billion from the same period last year, and 27 percent from the previous quarter, according to Thomson Reuters data released on Friday.
Assured Guaranty Municipal Corp. remained the top company, guaranteeing $4.8 billion of debt in the first three quarters of the year, with newcomer Build America Mutual Assurance Co. taking the second spot at $3.2 billion. Berkshire Hathaway Assurance Corp., a unit of Berkshire Hathaway Inc. , came in third, guaranteeing $106.9 million.
The par amount of insured municipal bonds has dropped significantly in recent years. Five years ago, in the first half of 2008, nearly $60 billion of new bonds were insured. In 2012, the amount of new insured munis dropped to $13.2 billion for the full year.
The total number of insured deals, meanwhile, fell to 775 in the first three quarters of 2013, or 123 fewer than in the same period in 2012.
A surge in letters of credit also ebbed this year. Some issuers turned to the letters to replace bond insurance, and many had used them to move their debt from auction-rate securities to variable-rate when the market for auction-rates froze in 2009.
In the first nine months of 2013, letters of credit backed $1.5 billion of bonds, a drop of 70.5 percent from the same period in 2012.
Wells Fargo Bank was the top provider, with about 25 percent market share by proceeds, while Citibank, which topped the list during the first half of 2012, slipped to fourth for the current period. J.P. Morgan Chase ranked second.
Orrick Herrington & Sutcliffe LLP remained the top bond counsel in the first half of 2013, a rank it held in 2012, with 244 deals totaling $24.8 billion, according to the Thomson Reuters data. Hawkins Delafield & Wood LLP maintained its second-place position with 222 deals, totaling $11 billion.