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Article: Secondary insurance for New York City becomes, rare, more expensive species. (Ambac Indemnity Corp.'s prices for secondary market bond insurance)
- Article from:
- The Bond Buyer
- Article date:
- March 5, 1992
- Author:
CopyrightCOPYRIGHT 1992 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Behind the scenes of yesterday's $995 million New York City general obligation debt sale was a brief and intense struggle over secondary market bond insurance.
Secondary insurance, an immensely profitable trading strategy, is being swamped by overwhelming demand, particularly from owners of high-volume credits such as New York City. The insurance industry is bursting at the seams with exposure to the city and, at this point, can back only small pieces at a time.
Last Friday, AMBAC Indemnity Corp. notified the market that it would sell insurance for $50 million of yesterday's borrowing. This "capacity," as the insurers call it, was sold within 45 ...