Bond Insurer
A company that issues the bond insurance policy for a bond issue.
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Bond Insurance (Policy)
A financial Guaranty insurance policy provided by a Bond Insurer which pledges to make scheduled payments of Interest and Principal of a Bond Issue in the event the Issuer is unable to make those payments on time. The Bond Insurer is typically given rights under the bond documents and will direct remedies on Default.
See Also
Guaranty
A third party’s promise to pay the debt service on the bonds or perform some other obligation, which is the primary obligation of another party.
Default
Breach of a covenant, promise or duty imposed by the bond, bond resolution/ordinance, an indenture or other financing document.
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Escrow Fund
Trust account established in the escrow deposit agreement that holds cash, investments, usually obligations of the federal government or, sometimes, federal agencies, or both, all of which are pledged to the payment of the debt service of the refunded bonds.