1989
DOI: 10.1111/j.1475-6803.1989.tb00516.x
|View full text |Cite
|
Sign up to set email alerts
|

An Examination of the Yield Spread Between Insured and Uninsured Debt

Abstract: Currently, municipal bonds insured by major insurance firms receive the highest credit rating from rating agencies. The interest rates on regular triple-A municipal bonds, however, have been persistently below those of insured bond issues. The yield spread between insured and uninsured triple-A bonds in the tax-exempt market is examined here, and it is shown that the yield spread may be attributable to split ratings and default-related risks.

Help me understand this report

Search citation statements

Order By: Relevance

Paper Sections

Select...
1
1

Citation Types

1
19
0

Year Published

1994
1994
2021
2021

Publication Types

Select...
9
1

Relationship

0
10

Authors

Journals

citations
Cited by 25 publications
(20 citation statements)
references
References 15 publications
1
19
0
Order By: Relevance
“…Theoretically, the market should price all insured bonds as triple-A rated. However, researchers (Hsueh and Chandy 1989;Peng and Brucato 2004) indicate that the price of insured bonds is affected by the fact that the creditor could still incur losses should the insurer default. Creditors must therefore consider the joint probability that the insurer and the issuer will default (Insured).…”
Section: Regression Modelsmentioning
confidence: 99%
“…Theoretically, the market should price all insured bonds as triple-A rated. However, researchers (Hsueh and Chandy 1989;Peng and Brucato 2004) indicate that the price of insured bonds is affected by the fact that the creditor could still incur losses should the insurer default. Creditors must therefore consider the joint probability that the insurer and the issuer will default (Insured).…”
Section: Regression Modelsmentioning
confidence: 99%
“… For recent studies of the effects of insurance on muni bond yields, see Quigley and Rubinfeld (1991) and Hsueh and Chandy (1989). …”
mentioning
confidence: 99%
“…financing with the use of bond insurance (see Hsueh and Chandy [1989] and Jaffe [1992]). It is unclear whether this is true for corporate issuers.…”
mentioning
confidence: 99%