Financial guarantors backed $38.75 billion of municipal bonds in the first half of 1992, more than any other half-year period in the history of the industry.

The first six months of this year set a new standard for insurance volume, exceeding the next-best period by more than $11 billion, or 40%. In the second half of 1991, the previous bellwether, guarantors backed $27.3 billion, according to company reports.

Compared with the first half of 1991, when the industry insured $23.13 billion, the financial guarantors registered better than a 67% increase.

The level of business also means insurers guaranteed the highest percentage ever of the overall new-issue market. Total issuance was $112.78 billion, according to the most recent numbers from Securities Data Co., so insured market penetration exceeded 34% for the first half.

The good times will persist, according to insurance executives.

"It looks very clear that this [calendar] year we'll easily set a new record," said David H. Elliott, president and chief executive officer of Municipal Bond Investors Assurance Corp. "And I don't see any great change in the environment. The reasons are still here, but even stronger."

The primary reasons are low interest rates and a decline in municipal credit quality. Insured volume directly benefits from the recession, as budget weaknesses send investors scampering to the triple-A haven of insurance and low rates, which spur refunding and new-money issue volume.

Refundings accounted for a tremendous portion of insurers' new-issue volume in the first half. MBIA, for example, did $8.6 billion of refunding business, for 61% of the firm's total activity.

But some doubt lingers as to whether the pipeline of refunding bonds is nearing empty. Ann C. Stern, president and chief executive officer of Financial Guaranty Insurance Co., said many municipalities are reaching the point where refunding potential is exhausted.

"There aren't as many [refundings] out there as there were in the first half," Ms. Stern said. "I don't thank any of the insurance companies will be unhappy with the 1992 result, but the repeat of the first, and likely to be a repeat of the first, and 1993 is unlikely to be a repeat of 1992."

MBIA was the top insurer in the first half, with $14.05 billion guaranteed. The firm thus backed 36% of the insured market and 13% of all tax-exempt issued sold.

A heated race for second place was won in June by AMBAC Indemnity Corp., which insured $10.54 billion of new issues during the first half. Financial Guaranty insured $10.41 billion during the period.

AMBAC's insured market share was 27.21%, while FGIC's share totaled 26.88%.

Financial Security Assurance Inc. guaranteed $2.32 billion, increasing its share of the insured market to 5.99%, up from the 4.1% for all of last year.

Capital Guaranty Insurance Co. guaranteed $1.1 billion, for a 2.84% share of the insured market. College Construction Loan Insurance Association, which just this year begun its full press on the education sector of the market, insured $298 million, or less than 1%.

Other insurers totaled about $5 million, according to Securities Data.

Given the steady demand for bond insurance by retail investors, the only area of possible market dislocation is a legislative intrusion on the tax-exempt market, sources said. Company executives, on the other hand, said that prospect remains remote because the nation's infrastructure is in dire need of low-cost financing.

"I'm always bullish about the growing need for infrastructure improvements," Mr. Elliott said. Presidential candidate Bill Clinton "has latched on to it, and there's more and more focus on the issue."

Ms. Stern agreed, "We don't see any change in the future for how municipalities finance the infrastructure, regardless of which of the three candidates are elected."

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