For Muni Bonds, Less AssuranceArticleStock QuotesComments 1MORE IN BUSINESS
The last remaining insurer of new municipal-bond issues is bracing for a fall that could bring its industry to a new low—and possibly increase borrowing costs for some small local governments.Moodys Investors Service warned in late March that it might cut bond-insurer Assured Guaranty Ltd.s AGO -1.59% credit rating to the single-A range from the current Aa3, which is three notches below the highest rating of triple-A.A downgrade, likely in the coming weeks, would probably crimp demand from local governments and other municipal issuers for Assured Guarantys coverage, analysts and local government officials say. That would leave fewer insured deals for investors to buy, as Assured Guaranty is the only company still writing coverage on new offerings.