Coverage that guarantees bondholders timely payment of interest and principal even if the issuer of the bonds defaults. Offered by insurance companies with high credit ratings, the coverage raises the credit rating of a municipality offering the bond to that of the insurance company. It allows a municipality to raise money at lower interest rates. A form of financial guarantee insurance. (See Financial guarantee insurance )

"Municipal Bond Insurance" In Context

"“We look forward to the resolution of this action in 2012, which will remove a major obstacle to National Public Finance’s re-entry into the municipal bond insurance market.” The Company’s U.S. public finance insurance business is ..."