American Municipal Bond Assurance Corporation

An insurance company founded in 1971 that guarantees payment of interest and principal for municipal bond issuers. When a state or local municipality issues bonds, it borrows money from investors and promises to pay them back using funds from public projects that generate revenue and/or from tax receipts. Unlike the federal government, which can print more money to pay its bills, municipalities have finite resources.

So, who are you gonna trust? A bunch of local politicians who promise to pay you back...or a private financial company (AMBAC) whose success depends on paying you back (and could be bailed out by the federal government)?