April 12 | Fri Apr 12, 2013 5:13pm EDT
April 12 (Reuters) - The amount of new insured debt in the U.S. municipal bond market totaled $2.1 billion in the first quarter of 2013, a 41.7 percent drop from the same period in 2012 and 36.1 percent lower than the previous quarter, according to Thomson Reuters data released on Friday.
The list of insurers included Berkshire Hathaway Assurance Corp, which insured new bonds for the first time since November 2009. The company insured just one deal in the quarter -- nearly $107 million of sales tax increment contract revenue bonds for the Colony Local Development Corp in Texas that were sold in February.
While the issuer had no underlying rating, the insurance gave the bonds ratings of Aa1 from Moody's Investors Service and AA-plus from Standard & Poor's Ratings Services.
Berkshire Hathaway, which began insuring muni bonds in 2008, started to pull back from the business just a year later amid the credit crunch, which stripped insurers of their top ratings. A Berkshire spokesman was not available to comment.
Assured Guaranty Municipal Corp continued as the top muni insurer with 129 deals totaling $1.17 billion in the first quarter, Thomson Reuters reported. Build America Mutual Assurance Co, which started last July, ranked second with $857 million of debt in 131 deals.
Insured munis, which once accounted for about half of new issuance in the $3.7 trillion market, made up just 2.6 percent of the $81.2 billion of munis sold between January and March.
New letters of credit also fell in the quarter to $604.5 million in 12 deals - a 16.8 percent fall from the same period in 2012 and a 33.6 percent drop from the previous quarter.
J.P. Morgan Chase was the top LOC provider with two deals totaling $189 million, followed by Wells Fargo Bank with three deals totaling $165.5 million, according to Thomson Reuters.
Orrick Herrington & Sutcliffe was the quarter's top bond counsel with 79 deals totaling $9.7 billion, followed by Squire Sanders with 50 deals totaling $4.9 billion.
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