Municipal Bond Forum
Insurers responsible for interest and principal
Q
I have many Puerto Rico munis and they are insured by Assured Guaranty. If the commonwealth restructures these bonds, what will happen afterward? Will I lose value? Will the insurer pay me back what I lose?
A
James A. Klotz responds:
Assured Guaranty, as all insurers, is responsible for making the full interest payments and principal at maturity. The insurance companies, however, are not obligated for any loss of market value in the interim.
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