Florida Hurricane Catastrophe Fund Issues 2011-2012 Reimbursement Contract Year Estimated Borrowing Capacity, Estimated Claims-Paying Capacity and Projected Balance as of December 31, 2011
Oct 26, 2011
The Florida State Board of Administration (“SBA”) issued a statutory advisory today, October 26, 2011, on the Florida Hurricane Catastrophe Fund’s (“FHCF”) estimated borrowing capacity, estimated claims-paying capacity and projected balance as of December 31, 2011 in relation to the FHCF’s 2011-2012 Reimbursement Contract Year.
The FHCF’s projected post-event borrowing capacity estimate is $8 billion for October 2011. Given the current state of the financial markets, this estimate is dependent on many factors, such as the size of an event or events, the limitations or constraints of the financial markets to absorb potential debt issuances, the time necessary to access such markets and the existing level of interest rates at the time of issuance.
The estimated borrowing capacity and projected available year-end cash balance provide the FHCF with a total estimated claims-paying capacity of $15.170 billion over the next 12 months. Click here to see the complete October 18, 2011 Claims-Paying Capacity Estimate Report.
The SBA’s obligation for the payment of reimbursable losses is limited in Section 215.555(4)(c)2., F.S., and shall not exceed the FHCF’s actual claims-paying capacity.
The FHCF’s projected year-end balance on December 31, 2011 is estimated to be $7.170 billion, which represents the amount of assets available to pay claims, not including any bond proceeds, resulting from Covered Events that may occur during the June 1, 2011 through May 31, 2012 FHCF Contract Year.
The SBA recognize that its good faith estimate is being made while highly volatile global financial market conditions exist; therefore, changing market conditions can dramatically impact the FHCF’s actual claims-paying capacity either positively or negatively. Current conditions may or may not be the same if and when the SBA determines that it is necessary to issue revenue bonds.
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