Citizens Property Insurance Board of Governors Reviews Pre-Liquidity Bond Financing Pricing

Jun 13, 2012


Citizens Property Insurance Corporation (“Citizens”) Board of Governors (“Board”) reviewed final pricing details of pre-event liquidity bonds for its Personal and Commercial Lines Accounts, but took no action during its brief informational meeting yesterday, June 12, 2012.

The financing includes the first bond issue for Citizens with a 10-year maturity rate.

Board members had the opportunity today to ask questions and voice concerns before the bond arrangements are finalized.  No concerns were voiced.

The purpose of the pre-event liquidity bonds is to provide Citizens with additional financial resources to pay valid claims for damage occurring during the 2012 Hurricane Season.

John Forney of Raymond James, Citizens’ financial advisor, said the financing confirms to all requirements established by the Board in previous authorizing documents.

He called the financing “a huge success” that puts Citizens in “good stead” from a liquidity standpoint for the 2012 Hurricane Season.

Citizens’ Chief Financial Officer Sharon Binnun said the bond notes range in duration from one to 10 years.  She summarized the bond maturity and interest rates as follows:

  • One-year notes: $200 million par value at 58 basis points
  • Three-year notes:
    • Fixed rate bonds: $75 million par value, 1.72 percent interest rate
    • Floating rate bonds: $200 million par value, 1.41 percent interest rate
  • Bonds maturing in 2016: $125 million par value, 2.07 percent interest rate
  • Bonds maturing in 2017: $130 million par value, 2.43 percent interest rate
  • Bonds maturing in 2018: $130 million par value, 2.83 percent interest rate
  • Bonds maturing in 2019: $160 million par value, 3.13 percent interest rate
  • Bonds maturing in 2020: $160 million par value, 3.4 percent interest rate
  • Bonds maturing in 2021: $160 million par value, 3.62 percent interest rate
  • Bonds maturing in 2022: $160 million par value, 3.77 percent interest rate

“I think this was a very successful transaction.   I am very pleased with the outcome,” Ms. Binnun said, noting that all the bonds are tax-exempt.

Chairman Lacasa also said he was pleased with the result.

“I’ve always said ‘let’s go long and large’ and you certainly have accomplished that in this particular issue,” Mr. Lacasa noted. “I am very happy.”

With no further business, the meeting was adjourned.

To view the meeting materials, click here.


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