Bond Insurance

Bond insurance is a financial product that provides protection to bondholders in the event of a default by the issuer. It serves as a guarantee that the insurance company will cover the principal and interest payments if the issuer fails to meet its obligations.

This type of insurance enhances the creditworthiness of the bonds, making them more attractive to investors.

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Types of Bonds

Covers the physical assets of the church, including buildings, grounds, and personal property. This can protect against damages from fire, theft, vandalism, and natural disasters.

Municipal Bonds

Often issued by states, cities, or other local government entities to fund public projects.

Corporate Bonds

Issued by companies to raise capital for various purposes.

Contract Bonds

Required by government or private entities for project-based work. Contract bonds include bid/proposal, performance and payment, and supply bonds.

License & Permit Bonds

Some businesses are required by law to purchase a surety bond before being able to operate, including health clubs, liquor distributors, and auto dealers.

Federal Government Bonds

Some agencies of the federal government accept or require surety bonds, including immigration, freight broker (BMC-84), and alchoholic beverages bonds, Lottery bonds.

Probate Bonds

Required by a probate court and include executor, administrator, personal representative, guardian, conservator, and fiduciary bonds.

Fidelity Bonds

Not required by any government agency but instead purchased by businesses to protect against employee dishonesty or theft. Also called business services bonds.

Miscellaneous Bonds

These bonds fall outside of the other categories listed and include public official, workers; compensation, utility deposit, self-insurers, etc.

Benefits of BONDS

Bond insurance offers businesses enhanced financial security by guaranteeing the repayment of principal and interest on a bond in case of issuer default. This assurance can improve credit ratings, resulting in lower borrowing costs and greater trust from investors.

Increased Credit Rating

Bonds insured by reputable insurers often receive higher credit ratings, leading to lower borrowing costs for issuers.

Investor Confidence

The presence of bond insurance can attract more investors by reducing perceived risk.

Liquidity

Insured bonds may have better liquidity in the market, making it easier for investors to buy and sell them.

Key Players

Bond insurance is a valuable tool in the fixed-income market, providing an additional layer of protection for investors and enhancing the overall stability of bond offerings. By mitigating risk, bond insurance plays a crucial role in facilitating access to capital for issuers.

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Legacy Guard is your partner in the financing journey. We build and retain relationships in the evolving financial markets to help businesses close deals, no matter the complexity of the financing or business plan.

This model allows us to explore numerous capital structuring options for your project while locking in the best possible terms and rates with fast turn times, minimal out-of-pocket expenses, or impact on personal credit.

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