The Effect of Default Risk Insurers on Municipal Bond Yields
AbstractInvestors in tax-exempt bonds may invest in bonds that are insured against default risk. Research in this paper explores whether it makes a difference to investors which insurer provides the default risk protection. Using a sample of bonds insured by each of the major insurers, evidence is presented that the insurer significantly impacts the yields of insured municipal bonds. Based on their ratings, the rating agencies view the major insurers as equals while investors do not. In addition, the results may be sensitive to insurer-specific information. Previous research is limited to the consideration of a single insurer. Results of the present study show that it may be inappropriate to generalize to all insurers the results obtained from analyzing one insurer. Past and future research should be evaluated in light of these results and the insurer effect considered, where appropriate.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Western Risk and Insurance Association in its journal Journal of Insurance Issues.
Volume (Year): 17 (1994)
Issue (Month): 1 ()
Contact details of provider:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (James Barrese).
If references are entirely missing, you can add them using this form.