An entity that specializes in providing insurance (credit protection) against the notional (principal) and interest cash flows that fall due to the holders of debt instruments in the event of default (of the issuer). A monoline insurer guarantees the timely repayment of principal and payment of interest in exchange for insurance premiums. An instrument or security that is guaranteed by a monoline insurer is a wrapped security (e.g., a wrapped bond).
Monoline protection takes the form of derivative-like financial instruments such as credit default swaps (CDSs).
Monoline insurers are also known as monoline insurance companies or simply as monolines.
