Come join the Asset Dedication team at the Technology Tools for Today Conference in Miami from February 11th – 13th. On the 11th at 1pm, we will be speaking on a Salesforce integration panel and on the 13th at 3pm, we will be moderating a discussion on online portals. If you are at the show and would like to meet up, Contact Us >>>
Municipalities can sometimes lower their borrowing costs by purchasing bond insurance. In exchange for making payments to an insurance company, the bonds receive the rating of the insurer rather than the issuer if the insurer’s rating is higher – and this means that the municipality can pay a lower yield and save money. Before 2008 most bond insurers were AAA-rated, making this an easy decision for issuers and a lucrative income stream for the insurers.
Assured Guaranty Municipal Corp. (AGM) is currently the larger of only two municipal bond insurance companies still writing new business. Municipalities are cutting spending wherever they can and are generally issuing fewer bonds. This will continue to decrease AGM’s revenues. AGM is also an affiliate of a larger insurance company which was also in the mortgage guaranty business. Moody’s downgraded AGM’s affiliates due to the continuing slow recovery of the mortgage business, though all remain at the “investment grade” level.
With AGM’s affiliates downgraded and its own revenue stream crimped, Moody’s essentially had no choice but to downgrade AGM two notches from Aa3 to A2 – still investment grade. Any municipal bonds AGM insures were also automatically downgraded unless their own ratings remained higher than AGM’s new rating. The downgrade therefore does not imply any negative change in the underlying ratings of the bonds themselves, only that the insurer’s rating has declined.
AGM was one of the largest insurers of municipal bonds and some of those bonds may be held by your clients, either from our purchase in an Income Portfolio or as pre-existing holdings. We are recommending that each bond insured by AGM be monitored on a case by case basis but, in light of the circumstances, no “wholesale” action is needed at this time. If we feel that any individual bonds owned by your clients require action, we will notify you by e-mail along with a recommendation specific to that bond based on its position in the client’s overall portfolio.
View Asset Dedication’s investigation as what the media is breathlessly reporting as the imminent collapse of Western civilization as we know it due to the fiscal cliff. The slideshare, they will provide some background and also a few talking points to help clients understand what is going on and how they can protect themselves.
Asset Dedication’s Chief Investment Strategist Stephen Huxley and President Brent Burns will be in Philly on October 9th, 2012 to speak on retirement income to the American College of Financial Services. If you are in Philly and want to meet up, contact us.
We were recently down in Miami for the T3 conference and had the pleasure of connecting with Dana Anspach. Dana is the author of the upcoming book Control Your Retirement Destiny, a columnist for About.com’s Guide to MoneyOver55 and the Founder of Sensible Money, LLC, a professional services firm which offers retirement planning and investment management services. After the conference, Dana shared some kind and generous words about Asset Dedication in her column that we would like to share with you. Click here to read the column >>>
Come join the Asset Dedication team at the 
View Asset Dedication’s investigation as what the media is breathlessly reporting as the imminent collapse of Western civilization as we know it due to the fiscal cliff. The slideshare, they will provide some background and also a few talking points to help clients understand what is going on and how they can protect themselves.
Asset Dedication’s Chief Investment Strategist Stephen Huxley and President Brent Burns will be in Philly on October 9th, 2012 to speak on retirement income to the American College of Financial Services. If you are in Philly and want to meet up,